- Over $120 million has flowed into the Solana network from other blockchains, suggesting renewed interest.
- Technical analysis indicates that Solana’s price may struggle to maintain upward momentum despite the increased investment.
Solana is experiencing a surge in capital as investors move funds from other blockchains. This influx signals growing confidence in the network. However, technical indicators suggest that the price of SOL may face challenges in sustaining its recent gains, creating uncertainty for investors.
Will the Inflow Translate to Price Growth?
In the last month, over $120 million has been transferred to Solana from networks like Ethereum, Arbitrum, Base, BNB Chain, and Sonic. Ethereum contributed the most, with $41.5 million, followed by Arbitrum at $37.3 million. This renewed interest marks a turnaround after a period where Solana saw significant outflows, partly due to events like Argentina’s LIBRA memecoin issue, which saw investors move $485 million to other blockchains like Ethereum and BNB Chain. This is according to data from deBridge.
Liquidity is returning to the market alongside renewed interest in Solana memecoins. Projects like POPCAT, FARTCOIN, BONK, and WIF have experienced price appreciation in recent weeks. Despite this positive trend, Solana’s fee generation currently stands well below earlier peaks. While January 2025 saw fee revenue exceed $400 million, more recent periods show a substantial decline, with April generating approximately $22 million in fees.
Technically, Solana’s price is still in a bearish trend on the daily chart. For a bullish trend shift to be confirmed, SOL needs to close above $147. The 50-day exponential moving average (EMA) is acting as a strong resistance around the $140 level. A break above this EMA would signal a higher chance of a positive reversal, but SOL has struggled to overcome this barrier.
Looking at shorter time frames, a bearish divergence has appeared between Solana’s price and the relative strength index (RSI). Historically, these divergences have preceded price corrections for SOL. Similar patterns have occurred several times this year, each followed by a price decline. The current setup resembles previous bearish divergences, suggesting a potential price drop in the coming days.
According to Glassnode, a substantial amount of SOL, over 32 million tokens, has recently been bought around the $130 level. This represents 5% of the total supply and could establish $130 as a strong support level. It noted potential resistance around $144 and a lower bound of $117, with $129 acting as a key pivot zone.
#Solana’s URPD shows a major shift in cost basis over the past two days, forming the largest supply cluster (>5%) at $129.79 with over 32M $SOL. This zone could act as a support during future drawdowns, reflecting high investor engagement at this price level.
Some investors are moving funds from Ethereum to Solana, hinting at growing interest in the Solana ecosystem. While this could put a bit of pressure on ETH prices, the amount is pretty small compared to Ethereum’s huge market cap, so it’s unlikely to cause any major shifts. Plus, the overall positive sentiment in the crypto space might help ETH in the long run.
At the end of the day, ETH’s price will mostly depend on what’s happening within its network and the bigger market trends. Ethereum is trading at $1,594, up 1.4% in the last 24 hours, with a trading volume of $ 14.18 B.
While Solana is experiencing a significant influx of capital, technical analysis suggests caution. The price may face resistance and potential corrections in the near term. Monitoring key support and resistance levels will be crucial for investors. Solana is trading at $133, up 6% in the last 24 hours, with a trading volume of $ 4.61 B.