Solana is one of the top networks, with a market capitalization of over $81 billion CoinMarketCap data. Even as crypto prices rise and sentiment improves, SOL has struggled to find momentum.
Solana Retreats: Will Prices Break $200?
Market data from the past trading week shows that SOL is stable, down 3% in the past 24 hours. The decline comes as Bitcoin, Ethereum and Dogecoin march higher.
To put the numbers in perspective: Dogecoin is up 22% in the past week. Bitcoin has added 8% in that period, moving closer to March highs.
As SOL prices retreat from this week’s highs near $185, CoinMarketCap experts note that the Solana ecosystem is growing. At the same time, the number of daily active users remains higher, an indicator of interest.
The uptrend has been solid this past week. After prices collapsed in early September before quickly recovering, the uptrend has caused the SOL to rise rapidly. The coin has added about 50% in the past two months and has risen above $150.
At spot prices, SOL remains within a bullish breakout formation. Even if the retracement pushes the coin lower, local support will be around $150. If buyers find support at this level, it could lay the foundation for another move higher towards the psychological round of $200.
Solana price drivers: thriving ecosystem, institutional support
Potential growth drivers include the active Solana ecosystem. Active users every day last week rose to almost 7 million. However, with prices recovering, the number now stands at around 5.5 million.
Most users are active meme coin traders on leading decentralized exchanges such as Raydium and Jupiter.
In recent months, after the launch of Pumping fun in January, SOL benefited from the go-live of tens of thousands of meme coins. Each launch requires locking SOL for liquidity, increasing demand and driving up prices.
While meme coins are key to the evolution of Solanathe network also has a decent DeFi ecosystem. DeFiLlama data shows that its protocols manage more than $6.2 billion, of which more than 50% are stablecoins. Of the $3.80 billion stablecoins in Solana, more than 69% are USDC.
Top DeFi dapps include Jito, a liquidity staking protocol that manages more than $2.4 billion. Others include Solayer – a liquidity restoration solution – and Ondo Finance – a real-world asset (RWA) tokenization platform – managing $275 million and $127 million respectively.
In addition to the explosive growth in the chain, Solana could benefit from institutional support. Robinhood, a trading platform, recently started offering SOL to EU customers.
At the same time, VanEck, one of the largest issuers of Bitcoin and Ethereum ETF, said issued the first exchange-traded note (ETN) in Europe. The ETN also offers wagering rewards.
Feature image from Adobe Stock, chart from TradingView