The cryptocurrency market is witnessing a robust rally this week, headlined by Solana (SOL) surging more than 19% to test critical long-term moving averages near the $89 mark. This sharp upward movement is driven by a combination of enhanced US Treasury liquidity operations and a significant influx of institutional capital into spot exchange-traded funds (ETFs). US-listed spot Solana ETFs attracted $14.58 million in net inflows on Thursday alone, recording their highest single-day entry of capital since late July. This consistent institutional backing has reignited investor risk appetite, driving SOL to a weekly high of $90.20 on Friday before consolidating around $89.43.
US Treasury Liquidity Expansion Triggers Crypto Short Squeeze
A primary catalyst behind the market-wide surge is the decision by the US Treasury to double its liquidity support buyback operations for longer-dated nominal coupon securities. The Treasury increased these operations from $2 billion to at least $4 billion per operation. This strategic intervention injected vital liquidity into financial channels, alleviating broader liquidity concerns that had previously dampened market sentiment.
The sudden influx of liquidity triggered a rapid short squeeze across cryptocurrency trading venues. Short sellers were forced to cover their positions, causing asset prices to spike aggressively. Solana benefited immensely from this shift, jumping more than 10% on Wednesday alone before extending its gains into the end of the week. Trading activity backed the price action, with SOL daily volume expanding to 2.98 times its 20-day average, signaling widespread market participation.
Institutional Inflows to Solana ETFs Hit Multi-Month Peak
Institutional demand for Solana has reached its highest intensity in weeks. Data compiled by SoSoValue indicates that SOL spot ETFs experienced $14.58 million in net positive entries on Thursday. This marked the third consecutive day of positive inflows for the asset this week, setting a new benchmark for single-day capital addition since the final week of July.
Market analysts note that if institutional allocations maintain their current momentum, SOL could sustain its trajectory toward higher resistance boundaries. The persistent capital flow into exchange-traded products highlights growing institutional confidence in Solana's underlying network efficiency and spot market durability.
Solana Technical Outlook and Key Price Boundaries
From a technical standpoint, Solana's chart structure remains firmly constructive, although momentum indicators show signs of overextension. The 14-day Relative Strength Index (RSI) is currently hovering around 79 to 80, placing the asset deep within overbought territory. Simultaneously, the Moving Average Convergence Divergence (MACD) indicator maintains a strong bullish posture at 1.93 against its signal line of 0.56, supported by a positive histogram of 1.37.
Regarding key price levels, immediate upside resistance centers around the 200-day Exponential Moving Average (EMA) at $89.28 (with live chart resistance near $92.73). A definitive breakout and daily close above this boundary would clear the path toward $96.19, where sellers may step in to take profits following the rapid ascent. Short-term pivot levels sit at $89.00, with resistance markers R1 at $90.37 and R2 at $91.32.
On the downside, initial structural support is located around the horizontal price floor of $77.07. This support zone is further strengthened by the 100-day EMA at $78.63 and the 50-day EMA at $76.91. Should a deeper market correction occur, the lower demand zone near $74.38, which aligns with the former ascending trendline, is expected to act as a primary buffer. Over the past 52 weeks, Solana has traded within a broad range between $60.41 and $148.22.
Bitcoin Reclaims $70,000 as Ethereum and Derivatives Bounce
Solana's individual gains are occurring within a favorable macroeconomic backdrop for digital assets. Bitcoin (BTC) rebounded past the key $70,000 threshold over the past 24 hours. According to observations shared by CryptoQuant founder Ki Young Ju, Bitcoin demand turned positive simultaneously across both spot and perpetual futures markets for the first time since reaching its all-time high in October 2025.
Ethereum (ETH) also maintained its upward trajectory as leverage flushed from the market during recent liquidations began to rebuild systematically. Ethereum's open interest, representing the aggregate value of outstanding derivative contracts, increased by 270,000 ETH to reach 13.2 million ETH in recent sessions, lifting ETH comfortably above the $2,200 level.
Broad Crypto Optimism Lifts Ripple and Dogecoin
Cross-border settlement token Ripple (XRP) expanded its recent gains above $1.16 on Thursday. The asset has surged by more than 20% since Monday, reflecting a steady recovery in market confidence. Similarly, Dogecoin (DOGE) gained positive traction for a second straight day, trading around $0.078 with a 24-hour gain exceeding 3%.
Reflecting this broad-based expansion in risk tolerance, the Crypto Fear & Greed Index rose sharply to 62 on Thursday, firmly placing market sentiment in the Greed category. This represents a significant rise from the previous day's reading of 46, confirming that improved liquidity and institutional inflows have effectively revived bullish sentiment across the crypto landscape.
