Solana Price Analysis: Institutional Investment Boosts SOL Bullish Momentum

Solana Price Analysis: Institutional Investment Boosts SOL Bullish Momentum

Key Insights:

  • Solana is still struggling with its post-FTX lows
  • Solana recently witnessed a large institutional capital inflow according to CoinShares, Europe's largest digital asset investment and trading group
  • SOL is in a short-term descending channel and a long-term bullish flag
  • SOL is primed to breakout soon, and rally to $27, $39

After FTX went under in November last year, a contagion spread throughout the market, bringing several companies and cryptocurrencies down with Alameda Research and FTX.

One of the most prominent cryptocurrencies that suffered the most in the crisis was SOL.

At the time of the FTX crash last year, SOL was already severely weakened in terms of price action. The cryptocurrency was trading around the $40 zone before the FTX/Alameda saga. And when the bomb hit, Solana spent the next few days in a crash that brought it to its knees around the $9 mark.

However, it now appears that the sun is beginning to shine on Solana again.

Institutional Capital Inflow in Solana

Ever since the 11th network downtime in February this year, the Solana network has been under a series of upgrades as a way to resolve the issues that caused network issues and transactional delays for its users.

Over the last few months, the cryptocurrency has recovered from its slump to $9 and now trades at $20.

With the rise of the Bonk memecoin on the Solana network, an increasing number of customers who originally left after last year's flatline have been returning.

For context, the Bonk memecoin is designed to generate more liquidity for the network's Decentralized Exchanges (DEXes).

Bonk, despite a slight retracement, has risen by more than ten times from its initial launch price and is even widely speculated to reach $0.00001 this year as more users jump on.

Metacade, on the other hand, is the first of its kind community-driven arcade and features one of the largest collections of arcade games in web3.

Metacade aims to serve as a meeting point for web3 users, gamers, creators and investors to share ideas about the most profitable blockchain gaming innovations.

In other news, according to the digital assets manager, CoinShares, the six weeks of outflows from institutional crypto investment products finally ended with the largest inflows recorded in over eight months.

Solana, among other cryptocurrencies, enjoyed about $4.8 million of inflows.

Solana Price Analysis

After the slump from $40 to below $9, Solana's popularity went down along with its price.

However, the cryptocurrency has experienced a steady rise from its slump, as a result of the numerous community-driven projects on the Solana network.

<em>Chart showing the price action on Solana</em>
Chart showing the price action on Solana

As illustrated above, $SOL has risen steadily from $7 in November last year, and even managed to gain a whole $20 in its rise to $27 in January this year.

After hitting $27 in January, Solana entered a price rejection, as its bears pushed it into a descending channel.

Zooming in on the 4-hour timeframe, we can see the formation:

<em>Chart showing descending channel on Solana</em>
Chart showing descending channel on Solana

After hitting the top of the channel around $24 during the bullish stint the market entered over the last few weeks, the cryptocurrency entered a rejection phase and is now facing a decline to the bottom of the formation.

However, this verdict is from a short-term perspective.

A closer look at the chart shows that the formation is also a bullish flag.

<em>Chart showing a bullish flag on Solana</em>
Chart showing a bullish flag on Solana

Flags like these are generally regarded as highly bullish patterns.

They form when certain assets reverse into a temporary descending channel during a bullish movement, and typically mean that the bullish trend will soon continue.

Judging by this, Solana may look slightly bearish at the moment. However, the cryptocurrency is highly likely to break through this formation soon and rally to the upside.

<em>Chart showing Solana's possible trend continuation</em>
Chart showing Solana's possible trend continuation

If this hypothesis proves to be right, Solana is bound to rally straight up to the next resistance level around $27, and then further up to $39 as it retakes its former highs.

Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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