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Solana, a prominent Ethereum Layer-1 competitor, has recently made headlines by attracting a substantial influx of institutional investments over the past few weeks. Throughout the month of September, Solana’s price surged, reaching above $23, propelled by strong institutional interest.
In a noteworthy development, Solana has recorded its most significant weekly inflow in months, amounting to an impressive $24 million, a level not witnessed since March 2022. This surge in institutional capital reaffirms Solana’s status as a favored alternative cryptocurrency, particularly in light of recent Ethereum product launches.
Positive Trends in Digital Asset Investments
Data from CoinShares reveals that the past week saw digital asset investment products experience inflows totaling $78 million, marking the second consecutive week of positive flows. Furthermore, trading volumes for Exchange-Traded Products (ETPs) surged by 37%, reaching a notable $1.13 billion during the same period.
Despite a robust rally in late September, Solana’s SOL price has undergone a partial retracement, falling short of the $25 mark. Over the past 24 hours, SOL’s price has declined by 5%, currently trading at $22.25, with a market capitalization of $9.2 billion. On the weekly chart, SOL’s price is down by 7.6%.
Despite this recent dip, Solana continues to maintain its position as the seventh-largest cryptocurrency by market capitalization. The price decline coincides with broader selling pressure across the altcoin market.
However, the outlook for Solana remains optimistic, with indicators suggesting that the recent 24-hour losses may not translate into significant further declines. A noteworthy signal is the crossover of SOL’s 30-day exponential moving average (yellow) above its 200-day average (blue), indicating the potential for a breakout in the near future.
Furthermore, despite a decrease in SOL’s relative strength index (purple) from 75 at the beginning of the month to approximately 60 currently, it comfortably remains above the 50 mark, indicating that buying momentum remains intact. Additionally, SOL’s support level (green) has demonstrated substantial growth since the start of September, reinforcing a pattern of consolidation at progressively higher levels, further strengthening Solana’s position.
Solana’s Strong Performance in DeFi Sector
Solana’s recent achievements extend beyond price gains. Last week, blockchain analytics firm Nansen reported that the total value locked (TVL) on the Solana blockchain has surged to $30.95 million. The Total Value Locked (TVL) in DeFi on Solana has almost doubled since the start of 2023.
Nansen’s report underscores the growing number of transactions and the increase in TVL as indicative of Solana’s capacity for robust economic activity. Additionally, Solana’s enhancements in fee markets and state compression have effectively addressed significant issues within its technology infrastructure.
Notably, the implementation of state compression has resulted in a substantial reduction in the cost of minting NFTs on the Solana network. Previously, creating one million NFTs incurred a cost of approximately $253,000. The implementation of state compression has significantly reduced this cost to a mere $113.
As Solana continues to attract institutional investments, demonstrate resilience in the face of market fluctuations, and strengthen its DeFi capabilities, it remains a cryptocurrency to watch closely in the evolving landscape of blockchain technology.
