Solana Holds Above $137 as Market Momentum Returns: Can SOL Target $160 Short-Term?
As of this writing, Solana (SOL) is trading for more over $137, which is a 3.2% increase in the last 24 hours. This is happening because the
Quick overview
- Solana (SOL) is currently trading at over $137, reflecting a 3.2% increase in the last 24 hours amid a broader cryptocurrency market relief rally.
- Despite a recent 14% rebound from a low of $121.50, SOL faces significant resistance from key moving averages and technical indicators suggest potential challenges ahead.
- The derivatives market shows bearish sentiment, with a 27% drop in open interest for SOL futures and negative funding rates indicating skepticism about short-term gains.
- A proposed protocol modification could enhance Solana's tokenomics by increasing its disinflation rate, potentially benefiting SOL holders in the medium term.
As of this writing, Solana SOL/USD is trading for more over $137, which is a 3.2% increase in the last 24 hours. This is happening because the whole cryptocurrency market is having a relief rally. The layer-1 blockchain token has started to rebound from its recent multi-week slump, but technical indications and derivatives market measures imply that any sustained bullish momentum may meet major challenges in the near term.
SOL/USD Technical Indicators Signal Cautious Recovery Amid Persistent Weakness
Since hitting a low of $121.50 on Friday, SOL has gone up 14%, but it is still stuck below important moving averages on the daily time frame. The 20-day exponential moving average is at $145 right now, and the 50-day, 100-day, and 200-day EMAs are all between $166 and $179, which is where the price is having trouble moving up.
The Relative Strength Index (RSI) is around 32, which is close to the oversold level. In the past, this has meant that sellers are running out of steam and there is a chance of a comeback. But because these key EMAs are so close together, any rise toward the $140–$145 zone could face a lot of selling pressure.
Over the past 30 days, SOL has lost 30% of its value, which is worse than the average altcoin market. This underperformance has made people wonder if the token can get back to being a top performer, especially because other altcoins like XRP, Litecoin, and Chainlink have recently launched competing exchange-traded funds that may be taking institutional capital flows away from the token.
SOL Derivatives Markets Flash Warning Signs Despite ETF Momentum
The derivatives market may be the most worrying indicator for SOL bulls. Since Friday, the funding rate for SOL perpetual futures has gone down, which means that traders are paying to keep their short positions. This negative positioning shows that experienced traders still don’t believe there will be any short-term gains, even though the token has recently bounced back.
Over the past 30 days, the total open interest in SOL futures has dropped by 27%. This means that there is less desire for leveraged exposure to the coin. The premium on two-month SOL futures compared to spot prices has decreased below 0%, which is a sign of a very pessimistic market. This number is normally between 5% and 10% in markets that aren’t very strong or weak.
These derivatives measures are very different from the good news about Solana ETFs. Solana ETFs have seen daily inflows of at least $20 million over the past 19 days, showing that institutions are consistently interested. But this infusion of capital hasn’t yet led to positive positioning in leverage markets, which suggests that even institutional purchasers may be taking a cautious, long-term strategy instead than banking on prices going up right away.
Solana Network Fundamentals Show Mixed Signals
The total value locked (TVL) on the Solana network fell to $10.5 billion on Monday, which is 20% less than it was a month ago. More worrying is that blockchain revenue, as measured by weekly fees, has dropped to its lowest level since May. This drop in fees helps explain why SOL hasn’t done as well as Ethereum, whose weekly costs only dropped by 5% during the same time.
Even with these problems, Solana is still the clear leader in blockchain activity metrics. The network still has the most active addresses and transactions, and it has a big lead over BNB Chain, which is in second position. According to Nansen data, Solana’s activity went up by 13%, while Ethereum’s activity went down by 15%.
This difference is a fascinating puzzle: even though more people are using Solana, the fees that come from that activity are going down. This discrepancy may be because the network is focused on high-volume, low-fee transactions that are common in memecoin trading and decentralized exchanges, rather than higher-value DeFi protocols that make a lot of money from fees.
Tokenomics Proposal Could Provide Medium-Term Support
The proposed SIMD-0411 protocol modification could be good news for SOL holders. This strategy would raise Solana’s disinflation rate from 15% to 30%, which might mean that about 22 million tokens would not be released on the planned schedule. At present values, this would be worth billions of dollars. If this plan is put into action, the network would attain its goal long-term inflation rate of 1.5% in little over three years, which is less than the present forecast of more than six years.
Investors who are worried about token supply inflation like this idea, but it’s not clear when it will be put into action or how long it will take to have a real effect on supply and demand.
Solana Price Prediction: $160 Possible But Requires Conviction
SOL is about to face a big test in the $140–$145 resistance zone, where a lot of technical indicators and moving averages come together. If the price stays above this level, it would be the first indicator that buyers are taking back control. This might lead to a test of $160.
But for a short squeeze to happen toward $160, SOL traders would need to be much more confident, especially in the futures markets where posture is still cautiously negative. Rallies may not last long and may be easy to take profits until funding rates go up and open interest starts to rise again.
The most likely short-term scenario is that prices will stay in the $130-$145 level, with any breakout depending a lot on how the overall cryptocurrency market feels and how the economy is doing. Traders should look for derivatives data to improve, especially a return to positive funding rates and rising open interest, as a sign that a longer-lasting rise is starting.
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