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Recent trends in the Solana (SOL) market indicate a compelling potential for recovery as realized profits decline, suggesting reduced selling pressure.
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Major corporate treasuries are poised to invest approximately $2 billion into SOL, potentially revitalizing interest and bolstering prices in the medium term.
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Richard Galvin, founder of Digital Asset Capital Management, emphasized the significance of this potential buying spree, likening it to major Bitcoin purchases made by prominent investors.
This article delves into Solana’s recent trends, highlighting potential capital inflows and their implications for future price movements, particularly useful for investors.
Significant Capital Inflows into Solana
The anticipated influx of $2 billion from institutional treasuries aiming to acquire SOL has garnered considerable attention in the crypto community. With SOL showing signs of reduced selling pressure, the expectation of a price rebound is growing, supported by the actions of strategic buyers.
As of early May, SOL Strategies had amassed a significant holding of 395,0078 SOL, and the DeFi Development Corporation (DFDV) has recently acquired approximately 609,233 SOL within a two-month timeframe. This aggressive accumulation could be pivotal in supporting the altcoin’s value.
Notably, the company Upexi has also increased its holdings to 679,677 SOL, representing a $96.5 million investment. Should the $2 billion goal be achieved, analysts predict a substantial appreciation in SOL’s price, drawing parallels to its recovery from $100 to $173, which marked an impressive 72% gain.
Tracking realized caps, capital inflows rose from $74.5 billion to $79.6 billion, indicating over $5 billion entering the ecosystem.
Source: Glassnode
Assuming conditions remain stable and following historical recovery patterns, the expected influx of $2 billion might catalyze a rally upwards of 30% for SOL. However, caution is warranted as concerns from co-founder Anatoly Yakovenko arise about the viability of treasury models in low-interest environments and amid comprehensive tax obligations.
Remarkably, SOL saw a cooling period following significant profit-taking, which amounted to $737 million in mid-May, illustrated well by the Realized Profit indicator.
Source: Glassnode
Despite the decline in realized profits by the end of May, which suggests that SOL could still experience upward movement amid reduced selling pressure, there are factors at play that may complicate recovery efforts, such as a negative funding rate.
On technical charts, SOL is currently at a crossroads that could dictate either a short-term rally or lead to further corrections. The 12-hour Relative Strength Index (RSI) remains at a neutral position, with price levels resting above essential short-term moving averages.
Source: SOL/USDT, TradingView
Looking ahead, should a rally materialize, price dips to levels around $168 or $160 could represent lucrative buying opportunities, setting sights on a target of $180. Conversely, a drop below significant moving averages could signal bearish sentiment, warranting closer scrutiny from investors.
Conclusion
The evolving dynamics surrounding Solana’s treasury activities and its recent price movements underscore the potential for significant price developments. While institutional interest may pave the way for recovery, ongoing economic conditions and market sentiment will remain critical in navigating future trends. Investors are advised to stay informed and approach potential entries with caution.
