Why Solana Is Going Up? ETF Hopes Fuel Price Surge

Why Is Solana (SOL) Price Up Today? What’s Fueling the $SOL Growth?

Solana Hits 3-Year High at $245

Solana has become one of the top performers in the crypto market, climbing by 2% to reach $245, its highest in three years. This recent surge is backed by two main factors that have sparked investor interest and boosted SOL's market momentum.

ETF Approval Hopes Drive Solana’s Growth

A significant boost for Solana came from VanEck’s head of digital asset research, Matthew Sigel, who voiced confidence in a potential spot Solana ETF approval in the U.S. by the end of 2025. On November 15, Sigel shared that he believed there was an “overwhelmingly high” chance of such an ETF being approved. This statement followed a shift in regulatory sentiment after Donald Trump’s pro-crypto victory in the November 5 presidential election. A potential regulatory green light could encourage institutional interest and investment in Solana, further lifting its price.

Solana’s 14.4% Surge and Strong Market Sentiment

Sigel’s optimistic remarks sparked a surge in Solana’s price, which has jumped by as much as 14.4%, including a 12% gain in the past 24 hours alone. This highlights the strong influence of positive regulatory news on SOL’s market performance.

DEX Metrics and Network Demand Bolster SOL

Solana’s impressive price increase is not just due to ETF approval hopes; the network’s fundamentals are also playing a crucial role. According to DefiLlama data, Solana leads decentralized exchange (DEX) trading with a commanding 33.59% share, leaving Ethereum trailing at 17.54%. Additionally, Solana’s transaction fees and MEV tips have hit record highs, pointing to greater network activity and usage.

Market analyst Aylo noted that this surge in adoption and network metrics is revaluing SOL, positioning it at approximately 29.5% of Ethereum’s market capitalization, with potential for further gains.

Short Liquidations Amplify Solana’s Price Rise

SOL’s latest price spike coincided with significant short liquidations in the futures market. On November 17, short positions worth $14.47 million were liquidated, vastly outnumbering the $3.6 million in long liquidations. When bearish traders close their positions due to a rising price, it can further fuel upward momentum.

Solana’s open interest (OI) hit an all-time high of $4.82 billion on November 17, a stark contrast to November 2021’s record OI. Weekly funding rates also saw a notable change, reaching 0.827% compared to -0.0378% two weeks prior, signaling bullish market sentiment.

Technicals Point to Continued Upside Potential

Technically, Solana’s recent breakout from a descending triangle pattern suggests that more price gains could be on the horizon. This pattern, usually bearish, flipped to indicate a bullish shift as SOL decisively broke through the resistance following Trump’s election win on November 6, accompanied by rising trading volumes.

With this breakout, Solana could rally further toward the $267-$270 range by late 2024, potentially setting a new record high. This target is based on measuring the maximum height of the triangle and applying it to the breakout point.

Conclusion

Solana’s rise to $245 is the result of both market optimism surrounding potential ETF approval and robust network fundamentals. As bullish indicators stack up, SOL seems well-positioned for further gains.