Solana (SOL) Witnesses Highest Weekly Institutional Investments Since March 2022: What Comes Next?

Solana’s Institutional Inflows and Price Movement

Despite a slight retracement, the recent crossover of SOL’s 30-day exponential moving average above its 200-day average indicates a potential breakout on the horizon. Solana, a strong competitor to Ethereum, has been garnering significant attention in the crypto sphere due to substantial institutional investments. In September, SOL’s price soared past $23, fueled by robust institutional inflows.

Solana experienced a remarkable surge in institutional investments, reaching $24 million in a single week, a level not seen since March 2022. This influx further solidifies Solana’s position as a preferred alternative cryptocurrency, especially in light of recent Ethereum product launches.

Solana Price Action and Market Overview

Data from CoinShares reveals that digital asset investment products received inflows totaling $78 million last week, marking the second consecutive week of positive flows. Additionally, Exchange-Traded Products (ETPs) witnessed a 37% increase in trading volumes, reaching $1.13 billion during the same period.

Although SOL’s price experienced a partial retracement after a strong rally in late September, it failed to surpass the $25 mark. Currently, SOL is trading at $22.25 with a market cap of $9.2 billion, reflecting a 5% decline over the last 24 hours and a 7.6% drop on the weekly chart. Despite this, Solana remains the seventh-largest cryptocurrency by market valuation.

Despite the recent dip in SOL’s performance, its indicators remain favorable. The crossover of SOL’s 30-day exponential moving average above its 200-day average suggests the potential for a breakout soon. Additionally, SOL’s relative strength index, although decreased from 75 to around 60, remains above the 50 mark, indicating ongoing buying momentum. The support level has also significantly increased since the start of September, showcasing a pattern of consolidation at progressively higher levels.

Solana’s Strong Performance in DeFi

Last week, blockchain analytics firm Nansen reported that the total value locked (TVL) on the Solana blockchain reached $30.95 million, nearly doubling since the beginning of 2023. This significant growth in TVL, along with the rise in transactions, demonstrates Solana’s capacity for robust economic activity.

Furthermore, Solana’s advancements in fee markets and state compression have addressed key issues within its technology infrastructure. State compression, in particular, has substantially reduced the cost of minting NFTs. Previously, creating one million NFTs on the Solana network would have cost approximately $253,000. With state compression, this expense has plummeted to just $113, making Solana an attractive platform for NFT creators and investors.