Why Solana (SOL) Could Rise 20% Amid Growing Institutional Support

Solana Price Notes (GROUND), a potential rise which could validate the upward trend that the altcoin has been observing for a few days now.

The main catalyst will likely be institutional investors whose interest has suddenly increased.

Solana Investors Push Up

Solana price is about to break out of the double bottom pattern it is in. However, to achieve this, the cryptocurrency will need the support of the market as well as its investors, which seems to be the case at the moment.

SOL seems to have regained the support of institutional investors in recent days, which it had lost since the start of the year. According to CoinShare's weekly report, the "Ethereum killer" observed $4.1 million in inflows for the week ending April 26.

That was it A surprising transformation for Solana, given that not only was the first quarter of 2024 bad, but it had an equally bad April in terms of net flows. From the start of the year to the end of April, SOL saw revenues of only $10 million.

However, this will likely change as we approach May as Solana's price begins to recover.

Learn more: Solana (SOL) Price Forecast for 2024, 2025, 2026, 2027

Furthermore, the cryptocurrency has also noticed a significant increase in gains from retail investors. Solana's funding ratio has gone from negative to positive and is constantly increasing.

Funding rate refers to the fee that one party of a perpetual contract pays to the other party to keep the contract price aligned with the market price of the underlying asset. Negative interest rates indicate the dominance of short contracts in the futures market, while positive signals indicate that long contracts are taking the lead.

As the SOL funding rate becomes more and more positive, SOL holders are likely to bet on an increase in the rate.

SOL Price Prediction: A Rise Coming?

The behavior of SOL investors will likely be consistent with what awaits the price of Solana. The altcoin is trading at $155 at the time of writing, just below the $156 resistance. This price represents the neckline of a double bottom pattern, which the digital asset has observed over the past month.

The double bottom pattern is a bullish reversal signal consisting of two consecutive bottoms, indicating a potential shift from a downtrend to an uptrend. Based on this trend, the potential upside target for SOL is $187.

Learn more: Three different ways to buy Solana Coin

This could lead to a 20% rally for the altcoin, provided it breaks out and crosses the $169 support floor.

However, if the breach fails, Solana price cannot reverse, with the altcoin potentially testing support at $138. A breakdown of this stop loss support could result in a pullback to $126, negating any bullish results.