Solana 
$86 (SOL) is experiencing a decline to price levels last seen in June, yet the market sentiment appears less pessimistic than the charts suggest. Institutional demand remains robust, and there are nascent positive shifts in the derivatives market. This complex scenario indicates that investors might be positioning themselves for the next significant move.
ETF Demand Stays Strong
Institutional interest in Solana ETFs remains strong despite SOL’s spot price dropping to multi-month lows. On October 28 and November 3, daily inflows exceeded $60 million. As of the article’s preparation, total asset size was approximately $541 million, with no signs of investor withdrawals.
Although recent inflows have been lower, they have not turned negative. This indicates that major investors are maintaining their positions rather than reducing their holdings. Additionally, VanEck’s submission of an 8-A form to the SEC suggests that the long-anticipated Solana spot ETF launch might be drawing near.
Furthermore, a recent development involving a Canada-based investment firm incorporating a SOL-based index product into its portfolio marks another positive sign for global institutional demand.
Weakened Price Structure Creates Market Tension
The strength in ETF inflows is in stark contrast to the weakening price momentum observed in weekly charts. SOL has fallen below the 50-week EMA of $176 and tested the 100-week EMA near $157 for the first time since June. Increased selling volume over the last two weeks confirms ongoing pressure on the price.
During this period, the RSI is nearing the oversold zone, and the MACD indicator’s deepening red bars are enhancing the bearish signals. For Solana to maintain its long-term structure, surpassing the mid-range of $150 is crucial.
Contrary to the weakness in the spot market, the derivatives market exhibits a more balanced outlook. For most of the week, total Open Interest remained stable between $2.94 and $2.95 billion, indicating no liquidity-driven sharp resolution or panic-driven closure of leveraged positions.
Moreover, funding rates have turned positive after a prolonged period in the negative zone, hovering around 0.0084 at the time of reporting. This suggests that after cautious days, long (buy) positions are re-entering the frame.
In conclusion, despite the ongoing price retracement in Solana, strong ETF demand and increasing stability in the derivatives markets suggest that investor behavior might lean back towards the positive side. If SOL can sustainably rise above $150, this scenario could denote the onset of a strengthening trend in the medium term.
