Solana (SOL) leads the market at $120... ETF funds, fundamentals, and upgrades drive the rally

▲ Solana (SOL) ©

Solana (SOL) has surged by 68% in two months, leading the rally in the virtual asset market. While expectations for further gains grew as spot ETFs continued their net inflow streak for 12 consecutive weeks and the Alpenglow upgrade was applied to the testnet, the price is now 45% above its 100-day moving average (MA), and open interest has swelled to $7.49 billion, clearly indicating short-term overheating concerns.

According to investment media TradingNews on September 29 (local time), Solana traded between $119.50 and $120.95, rising 1-1.7% in a day. Its 24-hour trading range was $116.47-$121.54, and its market cap was $70.2 billion, ranking 7th among all virtual assets. SOL bottomed out at $60.39 in June, then soared to $124.95 on September 25, a 99% increase from its low, and a 68% rise since late July. While the year-to-date decline for 2026 has narrowed to 2.7%, it is still 59% lower than its all-time high of $293.31 recorded in January 2025.

The key driver supporting the rally is ETF funding. US Solana spot ETFs saw a record net inflow of $188.21 million in the week leading up to September 25, with a maximum of $87 million flowing in on September 25 alone. The net inflow streak continued for 12 consecutive weeks, with cumulative inflows exceeding $1.61 billion. Notably, the Bitwise Solana Staking ETF (BSOL) absorbed $128.46 million, approximately 68% of the total weekly inflow. As BSOL offers a net staking yield of 5.31% per annum, the media analyzed this as a major reason for the sustained inflow of funds. The weekly ETF inflow as a percentage of market cap was also about 0.27%, higher than Bitcoin (BTC) at 0.14% and Ethereum (ETH) at 0.21%.

On the network side, Alpenglow was cited as the biggest catalyst for the rise. This upgrade, which significantly revamps Solana's consensus structure, aims to reduce transaction finality from approximately 12.8 seconds to 150 milliseconds and increase the network's fault tolerance limit from 33% to 40% of staked validators. Alpenglow was applied to the testnet on September 24 and the developer network (Devnet) on September 25, but the mainnet application schedule has not yet been confirmed. TradingNews suggested that if the mainnet schedule is announced in October, it could be a driving force for a rise towards $130-$136, but if the application is delayed until 2027, the price, which has already priced in upgrade expectations, could retreat to around $112.

However, technically, signs of overheating are significant. SOL is trading above its 20-day, 50-day, 100-day, and 200-day moving averages, and its RSI (Relative Strength Index) is around 68, while MACD (Moving Average Convergence Divergence) maintains a bullish signal. On the other hand, the price has diverged to a level 45% higher than the 100-day moving average of approximately $83, and Open Interest has increased by 14% from $6.57 billion at the beginning of this month to $7.49 billion. If a daily close is formed above $124.95, a Bull Flag breakout would be confirmed, opening up the possibility of a rise to $128 and then to $130-$136. However, if $120 is lost, the likelihood of a correction to $116-$118 and $112.50 increases.

The media analyzed that steady buying by ETFs and corporate treasury assets supports the price floor, while high Treasury yields and rapid price increases act as short-term burdens. With the US 10-year Treasury yield rising to 5.264%, SOL is behaving as a high-beta asset with greater volatility than Bitcoin, making US inflation and employment data also key variables. The media predicted that if SOL maintains $120 and breaks $124.95, it could rise to $128 and then to $130-$136 by mid-October. Conversely, if $120 breaks, $116 and $112.50 would successively become support levels, and if $112.50 is also breached, a correction to $100 could open up.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*