Solana price has regained momentum and jumped for five consecutive days and reached its highest point since Dec.6.
Solana (SOL) rose to a high of $245 on Saturday, up by 42% from its lowest point this month, bringing its valuation to $117 billion. It has become the fifth-biggest cryptocurrency after Bitcoin, Ethereum, Ripple, and Tether.
Here are some top reasons why SOL spiked and why that rally will likely continue.
Solana’s ecosystem growth
Solana has jumped because of the ongoing ecosystem growth. Its meme coins have grown and accumulated over $22 billion in market cap. Official Trump (TRUMP), which President-elect Donald Trump unveiled on Jan. 17, has a valuation of $4.4 billion.
The other popular meme coins in the ecosystem are Bonk (BONK), Dogwifhat (WIF), and Pudgy Penguins (PENGU).
Solana is also a big player in the non-fungible token industry. According to CryptoSlam, Solana’s NFTs had over $81 million in sales in the last 30 days, making it the third-biggest player after Ethereum and Bitcoin.
Solana’s ecosystem may continue growing because of its faster transaction speeds, lower costs, and the popularity of its Decentralized Exchange networks. Data shows that Solana’s DEX networks handled $32.2 billion in the last seven days, higher than Ethereum’s $9.2 billion.
This growth has led to higher network fees, which totaled $820 million in the last 365 days and $77 million this year. Some of these funds flow to Solana stakers; they’re receiving a 7% yield.
SOL ETF hopes are steady
Solana price has also rallied as investors anticipate the potential ETF approval by the Securities and Exchange Commission. A Polymarket poll places those odds at 77%, meaning that the agency under Paul Atkins may be more open to approval.
A Solana ETF would likely lead to more demand for the coin from institutional investors. This demand would be higher if the agency was open to allowing these tokens to be staked. In a note this week, JPMorgan anticipated that a Solana ETF would attract between $3 billion and $6 billion in the first year.
Solana price technicals are supportive
The daily chart shows that the SOL token rebounded after forming a double-bottom pattern at $175.42. It has now moved above the pattern’s neckline at $222.95, its highest swing on Jan. 6.
Solana, founded in 2020 by engineer Anatoly Yakovenko, remains above the ascending trendline that connects the lowest swings since January 23 last year. It has remained above the 50-day moving average, while the Relative Strength Index has tilted upwards.
Therefore, the Solana price will likely continue rising, a move that will be confirmed if the token rises above the key resistance at $264.15, its highest point in 2024.
Solana up until now
Yakovenko envisioned a blockchain capable of scaling to millions of transactions per second, providing a solution to what critics said were Ethereum’s slow transaction speeds and high fees. The network is designed to support decentralized applications (dApps) and cryptocurrency transactions.
Solana touts faster transaction processing and a higher throughput than many of its competitors.
After its mainnet launch in 2020, Solana quickly gained attention for its speed and low-cost transactions, attracting developers and investors. Throughout 2021, the network grew with numerous decentralized finance (DeFi) projects and non-fungible tokens on its platform.
Solana, currently backed by big-name venture firms like Andreessen Horowitz, continues to enjoy rapid development via efficient blockchain solutions in the ever-growing crypto space.
