Solana (SOL) has extended its weekly advance, climbing more than 19% as improved liquidity conditions and stronger institutional interest underpin the broader cryptocurrency market. The token reached an intraday high of $91.0 on Friday and was trading near $90.90, positioning it just above a critical technical level that could determine the next leg of the move.
The rally gained momentum after the U.S. Treasury Department announced plans to expand its buyback operations for longer-dated Treasury securities, raising the size of liquidity-support buybacks from $2 billion to at least $4 billion per operation. The move eased concerns about market liquidity and boosted appetite for risk assets, including cryptocurrencies. Solana jumped more than 10% on Wednesday as the announcement contributed to a broad short squeeze across the crypto market, a trend also seen in other major tokens like Ethereum's 18% surge.
Institutional demand has strengthened alongside the price action. Data from CoinGlass shows spot Solana ETFs attracted $14.60 million in net inflows on Thursday, the largest single-day intake since the end of July. This marked the third consecutive day of positive flows this week, signaling sustained interest from institutional investors. If inflows continue, they could provide additional support for SOL's recovery. However, a slowdown in ETF buying could remove a key source of momentum.
Technical resistance at the 200-day EMA
Solana was trading around $90.90 on Friday, just above its 200-day exponential moving average (EMA) at $89.28. This long-term trend indicator currently serves as immediate resistance. A sustained move above that level could strengthen the bullish outlook and open the door to the next major resistance area near $96.19, which would represent an additional gain of approximately 7.9% from current levels.
SOL remains comfortably above its shorter-term moving averages, with the 50-day EMA at $76.91 and the 100-day EMA at $78.63. This positioning reinforces the near-term bullish structure, although buyers still need to establish a decisive break above the 200-day EMA to confirm the trend shift.
Overbought signals and potential pullback
Despite the strong price action, some technical indicators suggest the rally may be stretched. The relative strength index (RSI) is near 79, firmly in overbought territory, increasing the possibility of a short-term pullback or consolidation. Meanwhile, the moving average convergence divergence (MACD) remains strongly positive, indicating that bullish momentum is still intact.
If SOL stays above the $89.28 level, support could emerge around the 100-day EMA at $78.63, followed by the horizontal support zone near $77.07 and the 50-day EMA at $76.91. A deeper correction could expose the former rising trendline near $74.38. For now, traders are likely to focus on whether Solana can secure a sustained close above its 200-day EMA, a move that could bring the $96.19 resistance level into view.
The broader crypto market has also seen notable moves, with Treasury buybacks and short squeezes fueling a $190B rally. Solana's performance is part of this wider trend, and its ability to hold above key moving averages will be closely watched in the coming sessions.
This article is for informational purposes only and does not constitute financial advice.
