Solana ETF Inflows Surge: Will SOL Price Follow Suit?

Despite a significant drop in Solana's price, inflows into spot Solana exchange-traded funds (ETFs) have surged, reaching a total of $476 million. The continued interest in these funds raises questions about the future price movements of the SOL cryptocurrency.

Key Takeaways

Spot SOL ETFs have experienced 17 consecutive days of inflows, with Bitwise’s BSOL fund comprising 89% of this total.
Futures data highlights increasing selling pressure near the $140 resistance zone, potentially pushing SOL's price back to the $120 level.

Solana ETF inflows soar: When will SOL price follow the trend?

Continued Interest in Spot SOL ETFs

Since its launch, Bitwise’s BSOL ETF has been a major player, bringing in $424 million out of the total $476 million in inflows. This demonstrates the ETF's significant role in attracting investor interest.

On November 19, BSOL recorded its third-largest daily intake of $35 million, marking its most significant influx since November 3. ETF analyst Eric Balchunas also noted the introduction of the 21Shares Solana ETF on the same day, which began with $100 million in assets under management (AUM).

Cryptocurrencies, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Altcoin Watch, Solana, ETF Bitwise Solana ETF netflows. Source: SoSoValue

Balchunas indicated that collectively, spot SOL ETFs have attracted around $2 billion, managing to pull in funds "almost every day," even amidst a climate of widespread market "extreme fear."

Related: 21Shares Solana ETF launches amid crash, yet flows indicate keen investor interest

Challenges Facing SOL as Selling Pressure Grows

On November 20, Solana briefly outperformed major cryptocurrencies like Bitcoin, Ether, and XRP, establishing a higher-high and higher-low pattern on one-hour and four-hour charts. However, this upward movement faced strong resistance near the 50 EMA, causing the price to retreat to around $132.

Cryptocurrencies, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Altcoin Watch, Solana, ETF Solana’s four-hour chart. Source: Cointelegraph/TradingView

Futures data raised caution signals, showing that the aggregated open interest (OI) stayed stable or slightly down during SOL's price rise from $130 to $140. This suggests a lack of new long positions supporting the rally. However, OI spiked when the price consolidated close to $140, indicating that new short positions were being created against resistance levels.

Additionally, the futures cumulative volume-delta (CVD) experienced a noticeable drop during price corrections, while the spot CVD consistently fell, indicating ongoing net selling from both derivative and spot traders.

Funding rates remained high even as SOL returned to $130, indicating that leveraged long positions are prone to risk and potential further declines.

Cryptocurrencies, Markets, Cryptocurrency Exchange, Price Analysis, Market Analysis, Altcoin Watch, Solana, ETF Futures data analysis for Solana on the 15-minute chart. Source: Coinalyze

The data points to the possibility that, without a quick recovery above the $140 mark, bullish momentum may fade quickly. The next key support level to watch is $120, where liquidity and previous demand coincide. A decisive move above $140 would negate the current bearish sentiment, but as long as conditions remain as they are, sellers will likely maintain dominance.

Related: 21Shares lists six additional crypto ETPs in Europe: Aave, Cardano, and more