Amid strong institutional demand and US regulatory clarity, one analyst has suggested that Solana (SOL) could break above a crucial psychological barrier for the first time in a month.
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Clear skies for Solana
Over the past week, Solana has delivered a remarkable performance, rising 22% from its March low and breaking the multi-week consolidation margin. The cryptocurrency has fluctuated between the levels of $77 and $92 over the past month and a half and failed to break above the upper zone of this range despite multiple attempts.
Following the recent upsurge in the crypto market, the altcoin hit a one-month high of $97 at the start of the week before falling to $90 on Wednesday. Amid this performance, analyst Ali Martinez reported that SOL recently issued a major bullish signal for the first time since January, indicating a relief rally could be in store.
As he explained, the SuperTrend indicator, which is used to identify the current market trend, has turned bullish on Solana and has flipped from Sell to Buy on the daily chart. Furthermore, the market watcher noted that there is little resistance up to the psychological barrier of $100, indicating a possible breakout to $115.
According to the post, the UTXO Realized Price Distribution (URPD) metric shows that “a robust demand floor” was established between $85.55 and $82.60, where 76 million SOL tokens were traded.
“This 38-day accumulation phase has effectively depleted sell-side liquidity. With no significant supply barriers left on the horizontal profile, Solana has a clear path to the $100 psychological level, followed by the $115 liquidity cluster,” he explained, adding that “the ‘ceiling’ is significantly thinner than the current floor.”
Martinez emphasized that if Solana maintains the 39-day distribution zone that has turned into a structural floor around the $93 area, a bull rally could occur “much sooner than people think.”
Institutional demand and regulatory clarity fuel SOL’s momentum
SOL’s expected recovery comes as spot Solana exchange-traded funds (ETFs) post their biggest single-day performance in two weeks and their best weekly run since the mid-January market crash.
According to SoSoValue factsThe category saw inflows of $17.81 million on March 17, the highest single-day net inflows since the beginning of the month, indicating strong institutional demand.
Meanwhile, SOL-based funds have seen five weeks of positive performance despite market volatility, largely fueled by geopolitical tensions. As the report notes, Solana Spot ETFs have cumulative net inflows of $989.3 million on a strong, “just shy of the $1 billion mark.”
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Adding to the momentum, US regulators recently shared long-awaited clarity on how federal securities laws apply to many crypto assets, resolving years of regulatory uncertainty.
On Tuesday, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) issued joint guidance to provide clearer rules for market participants, officially confirming that most crypto assets, including Solana, Cardano and XRP, are digital commodities rather than securities, joining Bitcoin and Ethereum in this classification.
At the time of writing, Solana is trading at $90, up 6.4% in the monthly time frame.
Featured image from Unsplash.com, chart from TradingView.com