Solana crossed the resistance at $170 and is close to breaking out towards $200.
Memecoins, low fees, and a highly scalable blockchain are core contributors to its growth.
Top analysts see Solana at a $2500 price target soon.
Having risen 4.16% in the last 24 hours and 11.7% in the last month, Solana has outperformed most large-cap altcoins, many of which, like XRP, have been struggling to gain higher price levels.
The crypto gained from $14 in Dec 2022 to over $200 in March 2024. An explosion in SOL-based memecoins like WIF and BONK drove the last surge in Solana's price in early 2024.
However, soon after that, crypto had to shed its gains as the market focused on Bitcoin and Bitcoin ETFs. Soon after that, the focus shifted towards Ethereum ETFs. On a side note, experts also expect a Solana ETF soon.
By June 2024, the markets were facing a dire shortage of liquidity caused by central banks increasing interest rates. The US Federal Reserve led this cabal of banks, finally reeling under pressure from the possibility of stagnant economies.
Finally, relief came on 18 September 2024 after the US Fed cut interest rates by 0.5%. This move was unexpected and injected huge liquidity into the economy and crypto markets.
Most cryptocurrencies began recovering slowly and steadily to the March 2024 levels. Until now, Solana struggled near $125, its bull market support level. Had it breached those levels, it might have crashed below $100.
In the last month since the rate cut, Solana managed to stay above $125 and crossed two hurdles (resistances) at $140 to $150 and another at $170, the latter being tougher.
Now, as soon as Solana crosses $174, its next resistance, it could drive its price towards $209.69, the highest price achieved in 2024. Today, at press time, Solana has crossed $174 but has not managed to sustain higher level
Memecoins played a major role in Solana's rise. The ecosystem, which has a $12 billion market cap, is the most major contributor to Solana's rise.
This was because memecoins are traded with very high frequency and the variety of memecoins in the Solana blockchain is huge, which then makes users trade more frequently while trying to capture each bullish move. To trade in Solana memecoins, users must buy SOL first to swap it with memecoins.
Further, the on-chain fees generated due to this memecoin frenzy is very high. Solana generates $60 million in on-chain revenue each month, and most of it hails from the memecoin markets.
Aside from the memecoins, Solana also benefits greatly from its highly scalable blockchain that keeps transaction costs low.
At press time, the Solana blockchain charges around $0.00064 per transaction, which is much lower than Ethereum's ($0.54 at press time).
Solana can theoretically process 65000 transactions per second, but at the moment, it processes around 3000 to 4000 transactions per second. This means the blockchain can still scale 15 to 20 times more before it needs further upgrades.
Today, Solana-based aggregator Jupiter has recently passed all others in terms of 24-hour trading volume, which would not have been possible without a highly scalable blockchain.
Crypto analyst Bjorn Hardarson sees the levels of $4500 arriving soon in Solana based on a super-bullish crypto chart pattern in its 1W charts. Since the trend is seen in a larger timeframe chart, it has a much better chance of becoming a reality.
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