Similar to Bitcoin, Ethereum, and several leading altcoins, Solana faces significant selling pressure. As buyers attempt to gain traction, the $160 price point is becoming a notable resistance level for traders to monitor.
Following some upward movement in September, Solana’s buyers were unable to push prices above this mark. Currently, there is a local double top, although one analyst on X points out that Solana has outperformed other platforms with a notable increase in net inflows.
Solana Secured Over $800 Million In Net Inflows Over Three Months
In contrast to Ethereum, Solana is an advanced blockchain that offers substantial scalability. The platform is capable of processing thousands of transactions per second, resulting in low fees, which is attracting more projects to launch on the network to enhance user experience. The capital influx into Solana over the past three months reinforces this advantage.
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To highlight the figures, Solana experienced over $800 million in net inflows. This capital increase is more than double what OP Mainnet, an Ethereum layer-2, acquired, and significantly surpasses the inflows that Sui, another high-performance blockchain, achieved in the same period. It also exceeds the figures registered by Base and Starknet, both popular Ethereum layer-2s, as well as Avalanche and the BNB Chain.
Interestingly, during this timeframe, platforms like Arbitrum, Ethereum’s largest layer-2, along with Linea and Blast, experienced outflows, and even Ethereum itself faced almost $800 million in significant outflows.
The reasons behind the outflows from Ethereum while capital flows into Solana remain to be explored. On-chain fee variances may be a contributing factor, while the ongoing sell-off of ETH in Q3 2024 could have sparked these outflows. Currently, ETH has slipped 35% from Q3 2024 peaks, whereas Solana is only down 25% from its July highs of around $192 before the recent downturn.
Will SOL Surpass $160?
Despite Solana’s growing appeal to investors, it continues to face strong selling pressure. For the bullish trend observed in the latter half of 2023 to persist, breaking the local barrier at $160 is essential. If this resistance is overcome, there’s potential for Solana to rise as high as $190 and possibly exit the current trading range.
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That said, there may be challenges ahead. If Bitcoin doesn’t rebound, it could negatively impact the altcoin markets, including Solana. Additionally, there are fears that the upcoming FTX token distribution might adversely affect SOL prices.
Furthermore, as noted by Token Unlocks, the team intends to release tokens starting December 26, 2024, distributing over 66,000 SOL each day for an entire year.
Feature image from DALLE, chart from TradingView
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