Solana Bullish Resumption: Impact of ETF Announcements

Solana Bullish Resumption: Impact of ETF Announcements
Solana Bullish Resumption: Impact of ETF Announcements

While the entire cryptocurrency market is in a phase of indecision, Solana bounces off the $125 support for the third time. Let’s examine the future outlook for the SOL price.

Solana (SOL) situation

After reaching a high of $211, Solana suffered a drop of more than 40%, gradually bringing its price towards $120. This price level has worked as a support for SOL, allowing it to take advantage of a bullish momentum that unfortunately ended at $190. Thus, this last price level constitutes a notable resistance. Lately, the Solana price has once again bounced around $125. Much to the delight of the latest entrants, the Canadian institution 3iQ and the American institutions Vaneck and 21Share have officially applied to issue a Solana spot ETF. Naturally, optimism towards the cryptocurrency is being felt. Some people do not hesitate to imagine a Solana price multiplied by 9 if these ETF applications are admitted.

However, the market reaction to this news has not impacted the cryptocurrency as much as Bitcoin during the same phenomenon. In fact, the cryptocurrency still seems heavy. This can be partly explained by a Bitcoin drop that weighs on the entire market. At the time of writing, Solana’s price is trading around $145. Solana’s medium- and long-term trend remains bullish. However, the fact that it is below its 50-day moving average raises doubts about the continuation of this trend. Fortunately, we can reassure ourselves with the 200-day moving average, which is still below the cryptocurrency’s price and remains oriented upwards. It is worth noting that these latter moving averages are getting closer, suggesting future volatility to be taken into account. As for the price dynamics, we can naturally observe that it has regained more strength, as evidenced by the Solana price itself and the oscillators. All of these elements demonstrate a real buying interest, suggesting that the Solana cryptocurrency is about to form a bottom, a chart pattern that suggests a bullish continuation.

SOL/USD daily price chart

The current technical analysis was carried out in collaboration with Elie FT, an investor and trader passionate about the cryptocurrency market. Today a trainer in Family Tradinga community of thousands of self-employed traders active since 2017. There you will find Lives, educational content and mutual assistance in the financial markets in a professional and friendly environment.

Zoom on Solana (SOLUSDT) derivatives

The open interest of SOL/USDT contracts has evolved in the same way as the cryptocurrency. This suggests that speculators have mostly taken buying positions. This hypothesis is supported by positive and slightly increasing funding rates, illustrating a mainly buying-focused trader participation. On the liquidations side, these remain low and do not send concrete signals. Nevertheless, it can be noted that the most significant liquidations occurred during the last bullish impulses, suggesting a capitulation of sellers in the cryptocurrency.

Open Interest / Settlements & Funding rate SOL/USDT

The SOL/USDT liquidation heatmap over three months shows that the cryptocurrency has broken through the liquidation zone located around $137. This has not aroused any buying interest, at least not directly. In fact, Solana first fell below $125 to position itself again above $135 and continue its rise. It is under this last price level that an apparent liquidation zone appeared. However, the most marked one is located above the current price of SOL, precisely below $180. The approach of the price to these levels could trigger a massive activation of orders, thus increasing the risk of a period of high volatility for Solana. These zones therefore represent a crucial point of interest for investors.

SOL/USDT Liquidation Heatmap

Hypotheses for the price of Solana (SOL)

  • If Solana price stays above $125, we could anticipate a bullish continuation towards the $170 level, and even $190. The next resistance to consider, if the bullish move continues, could be $210, and beyond that, Solana’s all-time high at $265. At this point, this would represent an increase of over 83%.
  • If Solana price fails to stay above $125, we could consider a return to $110 levels. The next support to consider, if the bearish move continues, would be around $100, and even $90. Further down, we can note the support at $86. At this point, this would represent a drop of less than 40%.

Conclusion

Solana has enjoyed a recovery at its support established since April. ETF applications by several institutions have sparked notable optimism in the market, although the impact has not been as strong as expected. Despite some short-term uncertainties, the overall trend remains positive, driven by favorable price dynamics and growing buying interest. That said, it will be crucial to closely observe the price reaction to the different key levels to confirm or deny the current hypotheses. It is also important to keep an eye on possible market “fake outs” and “squeezes” in each scenario. Finally, let us remember that these analyses are based solely on technical criteria and that the price of cryptocurrencies can also evolve rapidly based on other, more fundamental factors.

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Family Trading

Family Trading is a community of self-employed traders active since 2017 offering Lives, educational content and mutual assistance around the financial markets including that of cryptocurrencies with Elie FT at its side, investor and passionate trader on the crypto market.

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