Solana (CRYPTO: SOL) has rebounded this month, helped by the broader crypto market rally, rising ETF inflows, and a new governance proposal to cut future token issuance. The token is trading at $105, up sharply from its year-to-date low of $60, and has also formed a golden cross pattern.
Solana ETF Inflows Jump Amid Tokenomics Improvements
SOL rebounded and broke above the key resistance level of $97.58 as several catalysts aligned. One is that investors have kept buying SOL ETFs, which have posted inflows for ten consecutive days and pushed this month’s additions above $192 million.
That is a sharp jump from the $14.6 million added last month, and marks the biggest monthly total this year. Most notably, the Bitwise Solana Staking ETF (NYSE:BOL) passed the $1 billion milestone. In total, all Solana ETFs are now slowly approaching the $1.5 billion assets level.
Another catalyst is that Solana’s tokenomics are set to improve after the validators voted to double the network’s annual disinflation rate. This means that the network will increase the annual disinflation rate from 15% to 30%, while leaving the long-term inflation target of 1.5% unchanged. The vote means that 18.9 million fewer SOL tokens will be issued in the next six years.
More Solana’s metrics have also improved in the past few weeks. Its total value locked (TVL) in the decentralized finance (DeFi) industry has jumped to $5.85 billion from the June low of $4.4 billion. The amount of stablecoins in its ecosystem has jumped to $16 billion, making it the third-biggest chain after Ethereum (CRYPTO: ETH) and Tron (CRYPTO: TRX).
Investors are also continuing their staked Solana positions. Its staking ratio has jumped to 69%, with the total staked jumping to over 436 million tokens. These investors are receiving an annual return of 5.25%.
Solana Price Prediction: Technical Analysis
The chart shows that Solana has formed some bullish technicals. It has just flipped the important resistance level of $97.58 into a support level. The coin has also formed a golden cross pattern as the 50-day and 200-day Weighted Moving Averages crossed each other. This pattern often leads to a strong bullish breakout.
The token also formed an inverted head-and-shoulders pattern, which often leads to more gains. Therefore, there is a likelihood that the token will continue rising as bulls target the psychological level of $150. A drop below the support of $97.58 will invalidate the bullish outlook.
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