The Solana network has been experiencing a surge in institutional appeal this year, as evidenced by key milestones achieved recently. Solana ETFs and BlackRock’s BUILDL fund were at the forefront of those achievements, with key updates this week. BlackRock has been expanding its exposure to the Solana ecosystem through its BUILDL fund. The latter is now in its 7th month since its launch on the network, and the company’s investment in the fund recently surpassed the $250 million mark.
The BUILDL supply on Solana registered an accelerated pace since September. This aligned with the liquidity cycle as the FED kicked off rate cuts. This could indicate that Solana might be well-positioned as one of the networks to benefit the most from the easing liquidity conditions. Moreover, the fund’s expansion on the Solana network also highlighted its growing appeal for real-world assets (RWAs), as well as institutional activity. Both key narratives that previously fueled robust price action.
Solana ETFs Demonstrate Healthy Demand Despite Market Headwinds
Speaking of institutional activity, Solana also marked a healthy first 7 days of institutional inflows. Solana ETFs from Grayscale and Bitwise made their debut towards the end of October. They have since then achieved positive flows, signaling healthy conviction among institutional investors.
Solana ETF flows collectively attracted $294 million in inflows over their first seven days. This was even more impressive considering that Bitcoin and Ethereum ETFs experienced steady outflows during the same period. Simply put, Solana ETFs defied the overall market direction, thus demonstrating confidence among institutional investors. Despite these observations, Solana’s native coin SOL, was still heavily impacted by the recent market headwinds. Institutional demand did not offer enough momentum for the cryptocurrency to weather the recent downturn.
SOL Price Falls to Levels Last Seen in Early July
Solana’s native coin, SOL, slid by over 21% from its weekly top to its lowest level earlier this week. The cryptocurrency has so far extended its dip by more than 41% from its latest local top in September. Solana price also lost its $156 local support courtesy of the robust bearish move. An extended decline could see prices drop towards $130 before finding the next support level. SOL price exchanged hands at $154 at press time.
The cryptocurrency briefly dipped into oversold conditions earlier this week. Despite this, the prevailing demand remained weak, hence its struggle to bounce back. Other top coins also experienced similar outcomes. Weak whale activity also accompanied the subdued demand. For reference, SOL whales offloaded almost $10 million worth of SOL across Binance, Coinbase, and OKX spot segments in the last 24 hours. Meanwhile, whales also hedged their bets with over $104 million worth of longs on the Binance and OKX derivatives.
Speaking of derivatives, SOL’s open interest experienced a sharp nose-dive from over $10 billion at the start of November to just over $7 billion worth of open interest. SOL open interest was down by more than half its value at its historic peak, above $16 billion, achieved in September this year. It also highlighted the fact that open interest was still significantly elevated compared to its lowest levels this year. The elevated open interest could signal significant confidence and potential volatility ahead. Moreover, SOL’s rising institutional appeal may highlight potential redemption ahead. SOL might be among the top candidates for a robust recovery.