Solana (SOL) has been one of the best performers in the crypto market over the past 24 hours, rising 12% to over $242 on Nov. 17, its highest level in three years.
SOL/USDT four-hour price chart.
Solana’s price surge today can be attributed to two key factors. First, VanEck’s comments regarding the potential approval of a spot Solana exchange-traded fund (ETF) in the United States fueled investor optimism.
Second, the rise in key network metrics highlights the increased demand for SOL tokens, further supporting its upward momentum, in addition to other catalysts.
Solana ETF in U.S. possible by end-2025: VanEck
Solana’s price surged following comments from Matthew Sigel, head of digital asset research at VanEck, who expressed high confidence in the approval of a spot Solana ETF in the United States.
On November 15, Sigel noted that the odds of a Solana ETF being listed by the end of 2025 are “very high.”
He expects the U.S. Securities and Exchange Commission (SEC) to approve more crypto products, especially in light of Donald Trump’s recent crypto-friendly presidential election win on Nov. 5.
According to Sigel, expected regulatory approval for other crypto products, including a Solana ETF, could open the door for institutional exposure to SOL. This optimism appears to be fueling investor demand.
Following Sigel’s optimistic outlook for Solana, the price of SOL surged 18.51%, including a 24% gain in the past 12 hours.
Solana DEX Metrics Hits New Highs
Strong network fundamentals further fueled Solana’s price gains.
DefiLlama data shows that Solana has the largest share of decentralized exchange (DEX) trading volume, accounting for 33.59% of market activity as of November, far exceeding Ethereum's 17.54% share.
DEX volume by chain.
Additionally, Solana’s realized economic value, as measured by transaction fees and MEV (maximum extractable value) tips, has reached all-time highs, reflecting increased utilization of the network.
Solana real economic value chart.
Market analyst Aylo said Solana’s rising adoption, network utilization, and DEX volume dominance are driving investor sentiment and supporting SOL’s repricing relative to Ethereum.
“It currently represents ~29.5% of Ethereum’s market cap and is continuing to reprice,” he said, adding:
“$SOL will soon enter the price discovery space.”
Massive short liquidation pushes up SOL price
Solana’s price surge today coincided with a massive short liquidation in its futures market.
On November 17, the Solana futures market witnessed $14.47 million worth of short liquidations, while long liquidations were only $3.6 million.
SOL Total Liquidation Chart.
When traders short an asset, they bet that its price will fall. However, if the price rises, they may be forced to buy back their positions to limit their losses. SOL’s price increase forced many bearish traders to buy back their positions, further driving bullish sentiment for the cryptocurrency.
Meanwhile, Solana’s open interest (OI) surged to an all-time high of $4.82 billion on November 17, almost four times what it was in November 2021, when the cryptocurrency hit an all-time high of around $260.
SOL OI and Funding Rate as of November 17th.
SOL’s weekly funding rate spiked to 0.827% on November 17, compared to -0.0378% two weeks ago.
High OI means many active positions in Solana futures, reflecting increased speculation and liquidity in the market. Meanwhile, positive funding rates indicate that long traders are paying a premium to maintain bullish positions.
These metrics reflect the strong demand for betting on Solana’s continued price growth.
Solana Technicals Suggest More Upside
From a technical perspective, Solana’s price surge today is part of a descending triangle breakout.
A descending triangle is characterized by a downward sloping resistance line and a horizontal support level, which usually indicates bearish sentiment. However, a break above the resistance level indicates a shift in sentiment towards the bulls.
SOL/USDT weekly price chart.
On the weekly chart, Solana decisively broke out of its descending triangle resistance level following Trump’s victory on November 6, with the increase in trading volume confirming the strength of the upward move.
SOL is now eyeing a sustained rally toward the $267-270 area by the end of 2024, which would set new all-time highs. This breakout target is determined by measuring the maximum height of the triangle and adding the result to the breakout point.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making a decision.
