Solana (SOL) stock saw a strong rally in early May, but lost momentum as the month progressed, leading to a period of consolidation. After reaching a local high, Solana's price fluctuated within a narrow range.
However, despite the sideways movement, investors continued to accumulate Solana in anticipation of a potential breakout. Since the altcoin ended May relatively stable, there are important factors that could influence its price movement in June.
Solana needs institutional support
In May, institutional interest in Solana was noticeably low. The market was overshadowed by the rise of SUI, a newer blockchain that offered more opportunities for developers and gained significant traction.
While SUI saw inflows of $23.9 million, Solana attracted only $0.5 million, making it one of the least favored blockchains among institutional investors.
This inflow was even lower than the inflows of Cardano ($1.9 million) and Chainlink ($1.1 million) over the same period, indicating that institutional interest in Solana has waned. As a result, institutions are likely to continue focusing on other blockchain-related projects in the coming months.
The failure of these investors to participate could deprive Solana of significant capital inflows, which could impact its long-term growth.
Despite the decline in institutional interest in Solana, individual investors and whales remain confident in its future potential. The exchange balance shows a decrease of 4.13 million soles, worth more than $677 million, compared to the previous month.
This trend indicates that both small investors and large whales believe Solana is undervalued at its current levels.
The constant accumulation of SOL also prevents the altcoin from experiencing sharp declines, even amid broader market volatility.
This investor sentiment suggests that Solana's price may not experience significant declines in June, even if there is bearish sentiment in the broader cryptocurrency market.
SOL price may see gains in June
At the time of writing, SOL's stock price was $164, representing an 11.5% increase since the beginning of May but a 12% decline from its monthly high. Given the mixed signals from institutional flows and retail accumulation, Solana is expected to remain rangebound throughout June.
The oscillation between support at $161 and resistance at $178 is likely to continue, with key levels needing strong momentum from the broader market to push higher.
If Solana manages to break through the resistance level at $178 and secure a position above it, the price could rise towards $188.
This move will be supported by the following golden cross pattern, where the 50-day EMA intersects with the 200-day EMA. This indicates bullish momentum, and if confirmed, Solana could approach its multi-month highs.
However, investors should note that June has historically been a bearish month for SOL. Cryptorank data shows that over the past five years, monthly ROI has ranged from negative to positive. However, the average ROI is -8.97%.
Therefore, if history repeats itself and broader market signals turn negative or investors decide to take profits, Solana shares could see a decline.
A break below the $161 support level would raise concerns, potentially sending the price to $150 or even $144. Such a scenario would invalidate the bullish hypothesis and could signal losses for SOL holders.