Why is Solana (SOL) price up today?

Solana ( SOL ) is one of the best crypto market performers in the last 24 hours, rising by 12% to reach over $242 on Nov. 17, its highest level in three years.

SOL/USDT four-hour price chart. Source: TradingView

Solana’s price surge today can be attributed to two key factors. First, VanEck's comments on the potential approval of spot Solana exchange-traded funds (ETFs) in the United States have fueled investor optimism.

Second, a rise in crucial network metrics highlights increasing demand for SOL tokens, further supporting its upward momentum in addition to other catalysts.

Solana ETF in the US possible by 2025’s end: VanEck

Solana’s price surged following comments from VanEck’s head of digital asset research, Matthew Sigel, who expressed high confidence in the approval of a spot Solana ETFs in the US.

On Nov. 15, Sigel noted that the odds of a Solana ETF listing before the end of 2025 are “overwhelmingly high.”

He expects the US Securities and Exchange Commission (SEC) to approve more crypto products, particularly in light of Donald Trump’s recent crypto-friendly presidential election win on Nov. 5.

Source: Nate Geraci

According to Sigel, the anticipated regulatory green light for additional crypto offerings, including a Solana ETF, could open the door for institutional exposure to SOL. This optimism appears to have fueled investor demand.

SOL’s price has surged by up to 18.51% following Sigel’s optimistic outlook on Solana, including the 12% gains in the last 24 hours.

Solana DEX metrics hit a new high

Solana’s price rally is being driven further by strong network fundamentals.

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DefiLlama data highlights that Solana has captured the largest share of decentralized exchange (DEX) trading volume, accounting for 33.59% of market activity as of November, far surpassing Ethereum’s 17.54% share.

DEX volume by chain. Source: DefiLlama

Additionally, Solana’s real economic value, measured by transaction fees and MEV (maximum extractable value) tips, has reached an all-time high, reflecting increased network utilization.

Solana real economic value chart. Source: Blockworks

Solana’s rising adoption, network utilization, and DEX volume dominance is driving investor sentiment and supporting SOL’s repricing relative to Ethereum, according to market analyst Aylo.

“It’s currently ~29.5% of Ethereum’s market cap, and is continuing to be repriced,” he said , adding:

“$SOL will be heading into price discovery soon.”

Massive short liquidations boost SOL price

Solana’s price rise today coincides with massive short liquidation in its futures market.

On Nov. 17, the Solana Futures market witnessed $14.47 million worth of short liquidations, compared to just $3.6 million in long liquidations.

SOL total liquidations chart. Source: CoinGlass

When traders short an asset, they bet that its price will fall. However, if the price rises instead, they may be forced to buy back their positions to limit losses. SOL’s price rise forced many bearish traders to buy back their positions, furthering the cryptocurrency’s upward sentiment.

Meanwhile, Solana’s open interest (OI) surged to a record high of $4.82 billion on Nov. 17, almost four times than in November 2021, when the cryptocurrency established a record high of around $260.

SOL OI and funding rates as of Nov. 17. Source: CoinGlass

SOL’s weekly funding rates have surged to 0.827% on Nov. 17, compared to -0.0378% two weeks ago.

A high OI means many active positions on Solana futures, reflecting heightened speculation and liquidity in the market. Meanwhile, positive funding rates suggest that long traders pay a premium to maintain their bullish positions.

These metrics reflect strong demand to bet on Solana’s continued price rise.

Solana technicals hint at more upside

From a technical standpoint, Solana’s price gains today are part of a descending triangle breakout.

The descending triangle, characterized by a downward-sloping resistance line and a horizontal support level, typically indicates bearish sentiment. However, a breakout above the resistance suggests a shift in market sentiment toward the bulls.

SOL/USDT weekly price chart. Source: TradingView

On the weekly chart, Solana decisively broke through its descending triangle resistance following Trump’s win on Nov. 6, with a rise in trading volumes confirming the strength of the upside move.

SOL now eyes an extended rally toward the $267-270 area by 2024’s end, which would mark a new record high. This breakout target is determined by measuring the triangle’s maximum height and adding the outcome to the breakout point.