Solana Sustains Capital Inflow Since September 2023, Hitting a Daily Peak of $776M This Year

Solana has maintained a trend of daily positive capital netflow over the past year, outpacing Bitcoin and Ethereum in price performance.

Particularly, Solana has experienced a consistent influx of capital since September 2023, reaching a peak of $776 million in daily inflows this year, according to blockchain analytics firm Glassnode. 

Solana Sees Capital Influx Despite ETF Absence

This growing liquidity has contributed to Solana’s impressive price appreciation, with the crypto asset rising over 2,143% from its November 2022 low of $9.64, a price point it revisited on the back of the contagion from the FTX implosion.

Despite the absence of Solana exchange-traded funds (ETFs), SOL has managed to attract substantial investment. In contrast, Bitcoin and Ethereum have benefited from the introduction of spot ETFs, which have triggered greater institutional investment and contributed to their market growth. 

For instance, the approval of spot Bitcoin ETFs earlier this year led to impressive capital inflows, with investors injecting $36 billion into these funds, accumulating assets of about $110 billion. 

However, the U.S. Securities and Exchange Commission (SEC) has been hesitant to approve spot Solana ETF applications. The Crypto Basic confirmed that the SEC plans to reject filings from multiple asset managers seeking to launch such products. 

Notably, this stance is possibly due to regulatory uncertainties and concerns over investor protection. Despite facing regulatory hurdles, Solana has shown impressive growth and resilience. 

Since its November 2022 cycle low, the cryptocurrency has outpaced Bitcoin and Ethereum in price gains. According to Glassnode’s data, Solana outperformed Bitcoin and Ethereum in price movements on 344 of 727 days following the FTX collapse.

SOL Has Room for Growth

Also, the capital inflows have driven a substantial rise in Solana’s Realized Cap, which reflects the total value of coins in circulation based on their most recent transaction prices. From January 2023 onward, Solana’s Realized Cap grew from $22 billion to an impressive $77 billion, representing a remarkable $55 billion increase in liquidity.

Meanwhile, investor activity analysis shows that both short-term and long-term holders have contributed to profit-taking during this period. 

Coins held for periods ranging from one day to one week, one week to one month, and six months to one year have been contributors to sell-side pressure, each accounting for a substantial portion of realized profits. Nonetheless, this balanced distribution suggests that Solana appeals to a diverse investor profile.

Although profit-taking has occurred, Glassnode’s analysis shows that investors have yet to reach the unrealized profitability levels the market typically observes before long-term market peaks. This indicates that Solana’s value may have room to grow further in the ongoing market cycle.

Solana currently trades for $187.83, down 4.84% today after an impressive three-day performance that culminated in a run above $201 on Christmas Day. At this point, SOL needs to secure a full-body close above $200 to flip its momentum bullish.