As the crypto market rebounds from the recent lows, Solana (SOL) has reclaimed a crucial level, nearing a key resistance area that could set the stage for a long-awaited price recovery rally, according to some market watchers.
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Solana Bounces Despite ETF Outflows
The crypto market has surged above the $3 trillion mark for the first time in a week, with Bitcoin, Ethereum, and most leading cryptocurrencies reclaiming crucial support levels lost during the latest market pullback.
Solana joined the market rally and jumped from the recently recovered $135-$140 area to the upper zone of its local range on Wednesday afternoon. Notably, the altcoin has been trading between the $130-$145 price range over the past two weeks, briefly losing the lower boundary during last week’s correction.
This week, SOL’s price has reclaimed some crucial ground, surging over 10% since Monday’s opening and nearing the $145 resistance. Amid this performance, analyst Ted Pillows noted institutional participation, as SOL treasury companies have started to show early signs of recovery.
He also highlighted that Solana Exchange-Traded Funds (ETFs) have experienced record inflows this month despite the correction. According to Farside Investors’ data, the SOL-based investment products have registered $613 million in inflows since their launch on October 28.
It’s worth noting that throughout the recent pullbacks, Solana funds have seen a strong demand, with a 22-day positive streak while the altcoin’s price descended to multi-month lows.
However, as its price recovered, SOL’s ETFs registered their first negative in nearly a month. 21Shares’ TSOL, which launched a week ago, saw $34 million in outflows on Wednesday, outshining the over $13 million and $10 million in inflows of Bitwise’s BSOL and Grayscale’s GSOL. As a result, the whole category recorded net outflows of $8.1 million.
In his analysis, Ted Pillows also noted that “It seems like SOL has bottomed for a while, but institutional buying needs to accelerate here. Otherwise, it won’t take long for Solana to make new lows.”
SOL Ready For December Recovery?
Analyst Ali Martinez suggested that Solana’s pain might be over as its price “usually bottoms when investors capitulate… And for the past two weeks, that’s exactly what’s been happening.”
According to the chart, SOL’s price has historically found a floor when the Net Unrealized Profit/Loss (NUPL) indicator reaches the capitulation zone, which it has recently fallen to. Meanwhile, Crypto Patel highlighted that Solana is breaking out of a one-month downtrend, which could trigger a 25% recovery rally near the key $180 barrier in the coming weeks.
Another market observer warned that the altcoin is “walking straight into the lion’s den” as its price nears the $144-$146 resistance levels. Trader Mr. Ape noted that Solana’s price has been rejected three times from this heavy supply area, and momentum “is slowing again as we hit the zone.”
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To the trader, this is the crucial level to watch, as another rejection could send the price to the $132 support, where strong demand lies from the previous bounce. On the contrary, a successful breakout from this level and reclaiming it as support could confirm the shift and trigger a surge to the $157 area.
As of this writing, Solana is trading at $142, a 7.7% increase on the weekly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com