Can Solana hold $83? Can institutional buying create a rebound?

▲ Solana (SOL)/AI generated image ©

Solana (SOL) has fallen below the $86 resistance level amid a broader market sell-off in risk assets. However, unlike Bitcoin spot ETFs, Solana spot ETFs continue to see capital inflows, leading to analysis that "institutional funds are defending the downside."

According to the investment media TradingNews on May 28 (local time), SOL traded in the range of $82.97 to $84.57 during the day, settling around $83.71. This was influenced by factors such as US military actions near the Strait of Hormuz, inflation concerns, the hawkish stance of the US Federal Reserve (Fed), and the movement of funds into AI-related stocks, all of which pressured overall investor sentiment in the cryptocurrency market. SOL is currently trading below its 20-day and 50-day moving averages, with a market capitalization of approximately $48.41 billion and a 24-hour trading volume of approximately $2.29 billion.

Analysis suggests that the recent decline is more due to macroeconomic variables than Solana's own issues. With Bitcoin (BTC) falling below $73,000 and Ethereum (ETH) and XRP also plummeting, risk-averse sentiment has spread across altcoins. Coupled with widespread leverage liquidations in the crypto market and the prolonged US-Iran conflict, SOL also could not avoid the accompanying bearish trend.

However, institutional fund flows remain relatively robust. Even as Bitcoin spot ETFs and Ethereum spot ETFs continue to experience outflows, Solana spot ETFs maintain a net inflow. The media analyzed this trend as a sign that institutional investors' long-term investment demand is still alive. In particular, institutional capital inflows are evaluated as a key factor in defending the lower end of SOL's price.

Technically, whether the $83-$84.65 range can be defended is considered a key variable. If SOL maintains this support range, a scenario of re-breaking the $86 resistance, settling at $87, and even recovering to $90 is possible. Conversely, if the support breaks, there is an analysis that further decline to the next demand zone of $79 could open up. Currently, SOL remains below its 20-day moving average of approximately $88.28, continuing a short-term bearish trend.

In the long term, Solana network's technological prowess and ecosystem growth are presented as key arguments for a bullish outlook. Solana is highly regarded as a high-performance blockchain capable of processing hundreds of thousands of transactions per second, and past recurring network outage issues have reportedly been largely improved. The media also cited the expanding adoption of Solana in decentralized finance (DeFi), NFTs, and payments, as well as Solana's resurgence as a major Web3 platform after being virtually on the verge of market expulsion following the FTX collapse, as positive factors.

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