Solana is one of the most popular blockchain networks in the world, using a proof-of-stake consensus mechanism to provide smart contract functionality. SOL is the system’s native cryptocurrency, and as of January 2022, the total market capitalization level was $55 billion, but the collapse of several notable exchanges later that year caused this figure to plummet severely, decreasing to a mere $3 billion. However, 2023 came with new opportunities; the market started growing, and the market cap for Solana is currently around $115 billion as a result of a year over year price growth of 322%. This shows that investors currently have a more optimistic outlook for the crypto’s future, with some describing it as an alternative to Ethereum.
Those who want to keep their portfolios more diverse have begun to buy Solana and add it to their portfolios in order to make their list of holdings stronger and more reliable. And if the latest stats are anything to go by, Solana is bound to continue its run for the foreseeable future.
4%
October is traditionally regarded as a period of growth for the crypto world, with prices rising significantly during this time of the year. The enduring trend has earned October the nickname “Uptober” among community members. The price climbs are particularly noteworthy because September is the exact opposite, being a time for value decreases and reductions, with corrections typically rampant around this time. On October 24th, Solana registered a 4% ascent during the brief span of twenty-four hours. Although the recovery can seem very modest, it is nonetheless a sign of bullish performance.
The growth appeared in the aftermath of Bitcoin’s 1.6% daily gains, but on-chain and technical indicators show that there are definitely more gains ahead. As of October 28th, Solana’s price is at $176.31, with the general market sentiment being positive as a result of the bullish tendency.
The reasons
The cryptocurrency sector remains quite volatile, being subjected to frequent fluctuations and price changes. As a result, most investors take their time when it comes to analyzing the marketplace and all its movements. Doing this ensures the stability of your portfolio, as it allows you to make more objective decisions overall. One of the main reasons for Solana’s recent growth is the memecoin recovery process. There has been continuous and growing demand within the network’s layer-1, and that is largely believed to be the cause of Solana SPL and memecoins. This market trend was particularly noteworthy during the first half of 2024.
The current price is a reflection of the growth taking place in this ecosystem, with the memecoins recording double-digit gains on a daily basis. Dogwifhat is up over 30% compared to the previous month, while Bonk, Cat in a Dogs World, and Popcat also recorded gains ranging between 2.4 and 14%. Apart from that, there has also been increased on-chain activity, a feature that has backed Solana’s upswing even further, giving it more strength. This trend appeared as a consequence of the climbing prices of memecoins, as the value growth was preceded by a sharp increase in the number of transactions that are deployed on the network.
Between October 8th and October 14th, the number of daily transactions climbed by 30% from 26,288 to 34,027. Five days later, on October 19th, over 40k tokens were released on the blockchain, a considerable jump from the under 16,000 created on September 15th. All of these numbers are very clear indicators of the increased network activity and show that there has been considerable growth in user interactions within the platform. Higher revenues and a network usage boost naturally follow market periods like this. In the span of just forty-eight hours between October 21st and October 23rd, the daily revenue increased by a whopping 70.6%, between $1.3 to $2.3 million.
The total value locked has also been steadily increasing throughout October, from $5.1 billion on October 3rd to nearly $7 billion on October 24th. When growing demand and higher user interaction coincide, the effects on the price tend to be overwhelmingly positive.
The technical setup
Technical analysis is a well-known tool among investors from all over the world, a technology that uses historical data pertaining to the price points and several different specific tools to accurately identify statistical trends and ensure the enduring profitability of your portfolio. The price rally that took Solana’s price beyond the $160 barrier on October 20th was the result of a departure from an ascending triangle pattern.
Ascending triangles are typically bullish in nature, being the continuation of an upswing. However, there are also cases when they point in the direction of a downtrend, reversal, or correction. Similarly, a descending triangle is almost universally bearish, but breakouts in the opposite direction can definitely occur as well. The ascending triangles resolve when the price breaks above the trendline and continues to rise by as much as the maximum span between the lower and the upper lines. Solana bulls are currently eyeing the $200 level, which would be an increase of around 15% compared to October’s price levels.
The RSI levels are currently at 71, indicating that SOL is overbought. Pull-backs are possible as a result, but they are more likely than not to be natural occurrences and standard features that take place before growth really starts to pick up speed. If the support zone at $150 remains untouched and the horizontal line of the triangle at $163 stays in the same area, investors can continue to expect growth.
The flippening
The flippening is a term used to describe the potential scenario in which a new cryptocurrency becomes the largest in the ecosystem. The term typically refers to Ethereum overtaking Bitcoin, but several investors have used it to signify the new price records achieved by Solana against Ethereum. SOL has succeeded in growing approximately 600% since 2023, leading market participants to regard it as a serious contender for Ethereum’s seat in the crypto hierarchy. However, its market capitalization remains considerably lower than that of ETH. Only time and future developments will tell how things will evolve, but at least for the time being, Ethereum’s place seems secure.
The cryptocurrency marketplace is a constantly growing and evolving sector, with changes occurring very often. Investors who want to continue seeing gains must be aware of these factors in order to come up with more comprehensive strategies.
