Solana ETF Demand Remains Strong Despite Price Dip

Solana (SOL) has fallen to price levels not seen since June, yet the market sentiment doesn’t appear as bleak as charts suggest. This is largely due to sustained institutional demand and a slow but positive shift in derivatives markets. These factors suggest investors may be positioning for a future move.

Institutional interest in Solana ETFs remains robust, despite spot prices falling to multi-month lows. Daily inflows exceeded $60 million on both October 28 and November 3, with the total asset size around $541 million, showing no signs of investor outflows. While recent inflows have been lower, they have not reversed direction, indicating that large investors are maintaining their positions. VanEck’s submission of an 8-A form to the SEC further signals the potential for an upcoming Solana spot ETF.

Another positive development includes a Canadian investment firm recently adding a Solana-based index product to its portfolio – a possible indication of growing global institutional demand.

However, the strong ETF inflows contrast with weakening price momentum on weekly charts. SOL dipped below the 50-week EMA at $176, testing the 100-week EMA near $157, a level not seen since June. Increasing selling volume over the past two weeks confirms ongoing price pressure.

Technical indicators like the RSI have approached oversold territory, while the MACD displays deepening red bars signaling further decline. For Solana to maintain its long-term structure, it needs to regain support above $150.

Conversely, derivatives markets present a more balanced picture, despite the weakness on the spot market. Open Interest remained relatively stable between $2.94 billion and $2.95 billion for most of the week, suggesting no significant liquidations or panicked closures of leveraged positions.

Funding rates, previously negative for an extended period, have returned to positive territory, currently at approximately 0.0084 – indicating a return of long (buy) positions following a period of caution.

Overall, while Solana’s price retracement continues, the strong ETF demand and the stabilization in derivatives markets suggest a potential shift in investor behavior toward a more positive outlook. If SOL can sustainably reclaim the $150 level, this could mark the start of a strengthening trend in the mid-term.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.