Ethereum Layer-1 competitor Solana has been in the limelight lately seeing a large amount of institutional inflows over the past few weeks. During the month of September, the Solana price rallied all the way past $23 amid strong institutional inflows.
Solana recorded its most substantial weekly inflow in months, reaching $24 million, a level not seen since March 2022. This surge in investment further cements Solana’s position as the preferred alternative cryptocurrency, particularly in the context of recent Ethereum product launches.
Solana Price Action
Data from CoinShares also shows that last week, digital asset investment products experienced inflows totaling $78 million, marking the second consecutive week of positive flows. Additionally, trading volumes for Exchange-Traded Products (ETPs) surged by 37%, reaching $1.13 billion during the same period.
After a strong rally in late September, the Solana SOL price has entered partial retracement failing to hit $25. Over the last 24 hours, the SOL price is down by 5% and is currently trading at $22.25 with a market cap of $9.2 billion. On the weekly chart, the Solana price is down by 7.6%.
Despite this, Solana still remains the seventh-largest cryptocurrency by market valuations. The recent SOL price drop comes amid the broader selling pressure in the altcoin market.
Also, despite the recent dip in SOL’s performance, its indicators remain favorable, indicating that the losses of the past 24 hours may not lead to significant further declines. A notable development is the crossover of SOL’s 30-day exponential moving average (yellow) above its 200-day average (blue), suggesting the potential for a breakout in the near future.
Furthermore, while the altcoin’s relative strength index (purple) has decreased from 75 at the beginning of the month to approximately 60 currently, it still comfortably sits above the 50 mark. This suggests that the buying momentum remains intact.
Additionally, SOL’s support level (green) has seen a substantial increase since the start of September, indicating a pattern of consolidation around progressively higher levels, further strengthening the altcoin’s position.
Strong DeFi Performance of Solana
Last week, blockchain analytics firm Nansen shared a report highlighting that the total value locked (TVL) on the Solana blockchain now stands at $30.95 million. The DeFi TVL on Solana has nearly doubled since the beginning of 2023.
According to Nansen, the growing number of transactions and the increase in TVL showcase Solana’s capacity for robust economic activity. Additionally, Solana’s improvements in fee markets and state compression have effectively resolved significant issues within its technology infrastructure.
The implementation of state compression, in particular, has resulted in a substantial reduction in the cost of minting NFTs. Previously, creating one million NFTs on the Solana network would have incurred a cost of approximately $253,000. However, with the introduction of state compression, this expense has dramatically decreased to just $113.