Solana Tops Institutional Inflows with $118M: A Sign of Altcoin Season?
Key Insights
What Drives SOL Inflows?
Recent U.S Spot SOL ETFs, which include staking options, may have sparked this interest.
Are We Entering Altcoin Season?
Index readings suggest "YES," but most altcoins haven't recovered from October's downturn.
Solana [SOL] spearheaded last week's market recovery, primarily driven by institutional investors. According to a CoinShares report, SOL received $118 million in institutional inflows, leading the pack, with XRP following at $28.2 million.
Interestingly, Bitcoin [BTC] and Ethereum [ETH] saw outflows, indicating a shift towards altcoins.
With the U.S Spot SOL ETF launching last week amid high demand, this performance was anticipated. Similarly, the impending launch of XRP ETFs could further boost institutional interest.
Is Altcoin Season Here?
The question remains: Will this recovery trigger a broader altcoin rally? While some altcoins like NEAR have bounced back, recovering October losses, CryptoQuant data shows some investors are selling into the rally.
Recent spikes in the Altcoin Exchange Inflow Transaction Count highlight increased selling pressure, typical in altcoin recoveries.
BTC dominance and USDT's market share suggest potential for continued recovery if market sentiment improves. Notably, BTC's rise to $106k coincided with a dip in dominance from 60% to 59%, indicating investor interest in discounted altcoins.
Sustaining momentum depends on further declines in BTC and USDT dominance, reflecting a shift as traders exchange stablecoins for altcoins. The anticipated end to the U.S government shutdown may provide additional momentum.
ETF Store's Nate Geraci suggests that reopening the government and ETF markets could further fuel altcoin interest, particularly XRP.
Altcoin Season Index Reaches 100
Performance-wise, Cardano [ADA] led with a 9% gain, followed by XRP at 8%, and ETH at 5%.
While SOL led institutional interest, ADA and XRP dominated price gains. The altcoin season index surged to "100," yet many altcoins are still recovering.