23 April, 2024

Solana Surges Higher Amid Network Upgrades and Rising DeFi Activity

29 Jul, 2023

01 Nov, 2023

  • Solana rallied over 6% as investors cheer network upgrades and rising DeFi activity.
  • Monitoring $40 and $60 levels would indicate if a bullish breakout sustains.
  • The near-term target of $100 seems reasonable based on momentum and fundamentals.

Solana’s native token SOL saw a strong 6.23% price increase over the last 24 hours, rallying to $25.04. The total market capitalization of Solana now stands at $10.25 billion. Robust trading volumes of $778.67 million highlight significant investor interest in the recent price action. Analyzing key metrics provides insight into Solana’s potential outlook going forward. 

In the short term, SOL gained 1.15% over the past hour, continuing its upward momentum. The past day shows SOL’s impressive single-day surge of 6.23%. However, SOL remains down 7.75% over the last week, indicating the broader downtrend could persist.

SOL/USD price action: Coinmarketcap

The one-month view paints a different picture, with SOL skyrocketing 50.67% in the last 30 days. This contrasts with the relatively flat 2.43% six-month gain. The data suggests SOL is breaking out decisively after an extended downturn.

Solana Upgrade and DeFi Growth Support Rally

Several factors explain Solana’s powerful performance. Firstly, Solana implemented its long-awaited Proof-of-History fork on July 7th, delivering major network upgrades. The successful fork increased confidence in Solana’s capabilities among developers and investors.

Additionally, decentralized finance activity continues accelerating on Solana, recently achieving an all-time high total value locked above $1.2 billion. As more DApps launch on Solana, demand for the SOL token rises.

The overall macroeconomic conditions have shown improvement, with Bitcoin demonstrating stability and the stock market experiencing a rebound. This environment, characterized by increased risk tolerance, often has a more significant positive impact on alternative cryptocurrencies such as SOL (Solana). From a technical analysis perspective, SOL has managed to break through the diagonal resistance, indicating a shift in trend. This could pave the way for upward movement as bullish investors gain dominance.

SOL presents an intriguing opportunity for investors, given signs of a sustained reversal. Those who purchased the June lows near $25 are now firmly profitable in their positions. However, chasing short-term momentum has risks. 

Keeping a close eye on SO price action, the bulls need to maintain its breakout level of $40 during any market pullbacks to sustain a long-term uptrend. This would validate that SOL’s recent surge is a temporary spike and a consistent upward movement. Additionally, it’s important to monitor the 24-hour trading volumes. A high trading volume signifies robust conviction behind the rally, indicating that the market strongly supports the upward trend.

SOL/USD candle chart:TradingView 

SOL taking out overhead resistance around $60 would signal a macro uptrend is likely underway. A run toward the psychologically key $100 level becomes possible. Near-term support resides at $20 based on SOL’s multi-week trading range.

Solana Price Prediction 2023?

Solana set its record high of $260 in November 2021 during intense hype around so-called “Ethereum killers.” Since then, SOL has collapsed 86% amid the broader crypto downturn. With SOL trading 75% below its peak, many wonder if new highs are possible in 2023.

Reaching $260 again appears unlikely in the current risk-off climate absent parabolic market conditions. While fundamentals continue improving, on-chain activity closely tracks price. Therefore, SOL likely needs another massive speculative influx to approach its former peak. 

However, if macro conditions strengthen and Solana sustains its DeFi and NFT momentum, hitting $100 becomes realistic. That would require tripling from current levels. For long-term holders, reclaiming all-time highs remains achievable within 2-3 years as adoption grows. But in 2023 specifically, $100 seems the upper limit without euphoria.

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