Solana, aka the Ethereum killer, stole the fifth position on CoinMarketCap’s largest cryptocurrency by market cap after overturning Binance’s BNB token. During the early hours of the morning, the market cap of SOL was falling as the bulls tried their level best to withstand the pressure by making lower highs. However, this downtrend appears to have come to an end, with Solana reaching a market capitalization of $105 billion. After rebounding off this level, the token crossed $106 billion, surpassing BNB’s $104 billion.
At the time of publication, Solana is trading at $196, having gained more than 20% during the past week. The trading volume has increased by more than 100% and surpassed the $14 billion mark. In the quest to find the reason behind this drastic surge in market cap, we stumbled upon the Solana ETF.
SOL ETFs pave the way for the spike
As shown in the chart above, the cumulative spot ETF volume is on the rise. Within three days, the volume rose from $191 million to $263 million, showing increased investor confidence.
It’s not just the spot markets that are growing in volume; but the futures ETF market is also showing significant growth. The cumulative ETF volume in the graph above shows exponential growth. Increasing volume often shows rising inflows, and it signals that traders expect the underlying asset, Solana, to go up in price. If futures demand stays high, it can pull the spot price up, especially if market makers need to hedge by buying the underlying asset.
SOL targets $300; is it possible?
On the daily chart, Solana has formed the bullish bat harmonic pattern. In this pattern, a strong move down starts the pattern from X to A. Thereafter, the AB retracement happens. This is where the price bounces upward, typically retracing 38.2%–50% of XA. Following this retracement, the BC leg leads to a price fall again. This time, it retraces by 38.2%–88.6% of AB, and the CD leg completes the pattern.
Solana is currently building the CD leg, which completes the pattern. As such, if SOL treads along this same path and completes the pattern, the token could rise to almost $300.
