Solana (SOL) showed a strong upward trend in early May, but gradually lost momentum and recently entered a correction phase. After recording its initial peak, Solana's price fluctuated within a narrow range.
However, despite the sideways movement, investors continued to buy Solana, anticipating a breakout. As altcoins relatively stabilized in May, there are important factors that could impact prices in June.
Solana Needs Institutional Support
In May, institutional interest in Solana was noticeably low. The market was overshadowed by the rise of a new blockchain, Sui, which provided more opportunities for developers and received significant attention. Sui recorded $23.9 million in inflows, while Solana recorded only a modest $500,000 inflow, becoming one of the least preferred blockchains among institutional investors.
These inflows were lower than Cardano ($1.9 million) and Chainlink ($1.1 million) during the same period, indicating a decrease in institutional interest in Solana. Therefore, institutions are likely to focus on other blockchain projects in the coming months. This lack of investor participation may cause Solana to miss large-scale inflows, potentially affecting its long-term growth.
Although institutional interest in Solana has decreased, retail investors and whales continue to show confidence in its future potential. Exchange balances decreased by 4.13 million SOL, over $677 million, during the past month. This trend indicates that retail investors and large whales believe Solana is undervalued at current levels.
Continuous accumulation of SOL prevents altcoins from experiencing sharp declines despite market volatility. This investor confidence suggests that Solana's price may not experience a significant drop in June, even with bearish sentiment across the cryptocurrency market.
SOL Price Could Rise in June
At the time of writing, Solana's price is $164, up 11.5% from early May but down 12% from its monthly high. Considering the mixed signals of institutional inflows and retail accumulation, Solana is expected to move within a range during June. It is likely to oscillate between the support level of $161 and resistance level of $178, with strong market momentum needed for a higher breakout.
If Solana breaks through the $178 resistance and establishes itself above it, the price could rise to $188. This movement will be supported by a golden cross pattern where the 50-day moving average crosses above the 200-day moving average. This crossover signals upward momentum and, if confirmed, could bring Solana closer to its multi-month high.
However, investors should note that historically, June has been a weak month for Solana. According to Cryptorank data, monthly ROI over the past 5 years has varied from negative to positive. However, the median ROI is -8.97%.
Therefore, if history repeats and market signals turn negative or investors decide to take profits, Solana could experience a decline. Falling below the $161 support line would increase concerns, and the price could drop to $150 or $144. This scenario could invalidate the bullish logic and signal potential losses for SOL holders.
