Solana Eyes $160 After Surpassing Ethereum in Institutional Inflows

Solana’s (SOL) potential to erase the losses led by the recent Mt. Gox news is gaining momentum. One of the most promising signs is the recent rise in inflows toward SOL-based institutional funds, painting a bright picture for the cryptocurrency’s run-up toward $160 in July.

Institutional Investors Pick Solana Over Ethereum

In the week ending July 5, Solana-based investment funds saw a significant influx of $16.30 million, surpassing Ethereum’s (ETH) inflows of $10.20 million during the same period. This substantial addition has propelled Solana’s year-to-date inflows to $57 million.

Solana vs. Ethereum net fund flows. Source: CoinSharesIn contrast, Ethereum funds have experienced net outflows, with a negative balance of $15 million year-to-date.

Institutions flocked toward Solana funds—and other crypto funds—despite growing fears of a massive Bitcoin (BTC) market dump. These concerns stem from the Mt. Gox trustee’s ongoing reimbursement of over $8 billion worth of coins to its creditors and the German government’s recent liquidation of 10,000 BTC.

The crypto market dropped 11.28% in the week ending June 5. SOL’s own losses amounted to around 10.25% in the same period despite the institutional inflows.

According to CoinShares researcher James Butterfill, the crypto market drop “is likely being seen as a buying opportunity” by institutional investors. In other words, the richest investors believe in the market’s ability to undergo a sharp bullish reversal in the future.

That increases SOL’s potential to witness a similar rebound trend, given its consistent positive correlation—0.75 out of the perfect score of 1—with the crypto market trends.

SOL Price Analysis: Rebound to $160 Next?

The primary reason behind increasing institutional inflows into the crypto market is increasing bets on a 25 basis point interest rate cut after the September Federal Reserve meeting.

As of July 8, bond traders favored a 72.5% possibility of a rate cut in September compared to 46.6% a month ago, according to CME data. Their dovish outlook has improved, particularly after the release of the U.S. jobs data on July 25, which showed hiring slowed down in the previous month.

The yields on short-dated U.S. Treasury dropped substantially after the jobs report, reducing the opportunity cost of holding bonds. In turn, their declines boosted their appetite for riskier assets like stocks and cryptocurrencies like Solana, a core reason behind the strong inflows into the crypto funds.

Interestingly, these strong fundamentals appear when SOL is testing a multi-week support trendline at around $128—which also coincides with its 200-day exponential moving average (200-day EMA; the blue wave) for a potential rebound.

Should a bounce back occur, the Solana price’s next upside target appears around its descending trendline resistance at $160. This level aligns with SOL’s 0.382 Fibonacci retracement level.