Rival to Ethereum Layer-1 The past few weeks have seen significant institutional inflows, placing Solana in the spotlight. The Solana price surged beyond $23 in September on the strength of significant institutional inflows.
Solana saw its largest weekly influx in months at $24 million, the highest level since March 2022. Solana’s status as the favored alternative cryptocurrency is further cemented by this increase in investment, especially in light of recent product releases for Ethereum.
Price Action in Solana
Additionally, according to data from CoinShares, digital asset investment products had inflows of $78 million last week, marking the second straight week of positive flows. Additionally, during the same time period, trade volume for Exchange-Traded Products (ETPs) increased by 37% and reached $1.13 billion.
The price of Solana SOL has undergone a partial retracement after a significant surge in late September that failed to reach $25. The SOL price has dropped 5% over the past day and is presently trading at $22.25 with a $9.2 billion market cap. The Solana price is down 7.6% on a weekly basis.
Despite this, according to market assessments, Solana is still the seventh-largest cryptocurrency. Recent SOL price decline coincides with broader cryptocurrency market selling pressure.
Additionally, even if SOL’s performance recently declined, its leading indications are still positive, suggesting that the losses from the previous day might not trigger further severe decreases. The crossover of SOL’s 30-day exponential moving average (yellow) above its 200-day average (blue), which raises the possibility of a breakout in the near term, is a noteworthy move.
The altcoin’s relative strength index (purple), which was 75 at the beginning of the month but is now around 60, is still comfortably over the 50 threshold. This may indicate that the buying trend is still strong.
Additionally, since the beginning of September, SOL’s support level (green) has significantly increased, indicating a tendency of consolidation around steadily higher levels and bolstering the altcoin’s position.
Solana’s Strong DeFi Performance
According to a research published last week by blockchain analytics company Nansen, the total value locked (TVL) on the Solana blockchain is currently $30.95 million. Since 2023’s inception, the DeFi TVL on Solana has nearly doubled.
Nansen claims that the increasing volume of transactions and the rise in TVL demonstrate Solana’s ability to sustain significant economic activity. Improvements in the fee markets and state compression made by Solana have also successfully addressed substantial problems with its technological infrastructure.
The price of producing NFTs has significantly decreased as a result of the introduction of state compression in particular. Previously, it would have cost about $253,000 to create one million NFTs on the Solana network. State compression, on the other hand, has significantly reduced this cost to just $113.
