Solana (SOL) is trading above $94 on Monday, extending a 27% weekly gain that pushed the token to its highest level in two months. The move comes amid renewed institutional interest and the start of validator voting on three network proposals, though technical indicators suggest the rally may be due for a pause before a decisive push above the $100 mark.
Governance votes and tokenomics changes
Solana validators began voting Monday on three governance proposals, with the process scheduled to conclude Thursday. The proposals, known as SGP 1, SGP 2, and SGP 3, could reshape the network's governance, issuance schedule, and transaction fee structure.
SGP 1 seeks approval of the Solana Constitution, which would establish a formal framework for network-level decision-making. SGP 2 proposes increasing the disinflation rate from 15% to 30%, which would accelerate the decline in SOL's inflation rate and slow supply growth. SGP 3 would revise transaction fees by introducing a fixed base inclusion fee paid to block leaders, plus a resource fee based on computing resources, with that portion burned.
These proposals, if approved, could have long-term implications for SOL's supply dynamics and network economics, providing fundamental support for the token's recent price action.
ETF inflows signal institutional demand
Institutional demand for Solana strengthened last week as SOL-focused ETFs recorded four consecutive days of inflows, totaling $28.34 million, according to CoinGlass data. This marked the highest weekly inflow total in two months and coincided with the 27% price rebound.
Sustained ETF inflows could provide additional buying support and strengthen the case for a broader bullish reversal. However, one week of positive flows does not confirm a lasting trend, and investors will be watching whether institutional demand continues after the rapid price increase.
Technical levels and market outlook
On the 4-hour chart, SOL is trading above both the 50-day exponential moving average (EMA) at $79.04 and the 200-day EMA at $92.67, supporting a positive short-term outlook. The immediate resistance level is the May 11 high at $98.41, followed by the psychological barrier at $100.
A decisive daily close above $100 would confirm a continuation of the recovery and could open the path toward $112.52, the 127.2% Fibonacci extension of the decline from $98.41 to $60.13. On the downside, the 200-day EMA at $92.67 provides immediate support; holding above this level would preserve the recent breakout and keep the $100 target within reach.
The 4-hour Relative Strength Index (RSI) stands near 64, placing SOL close to overbought territory. An elevated RSI reflects strong buying momentum but also indicates the rally may be stretched in the short term. The Moving Average Convergence Divergence (MACD) indicator continues to trend higher with a positive histogram, showing buyers remain in control.
Together, the indicators suggest the broader bias remains bullish, although the risk of profit-taking or consolidation has increased. A close below the 200-day EMA could extend the pullback toward the 78.6% Fibonacci retracement level at $88.56. If selling pressure intensifies, SOL could fall toward the 50-day EMA at $79.04 and the 50% Fibonacci retracement level at $76.92.
For now, Solana's outlook remains constructive above $92.67. A confirmed break above $100 would strengthen the bullish case and shift attention toward $112.52. Traders may also monitor related developments, such as Flowra's open auction on Solana, which recently boosted validator revenue, and broader crypto market trends, including Bitcoin's move above $71K.
This article is for informational purposes only and does not constitute financial advice.
