- Solana is experiencing a price surge driven by increased DeFi activity and rising network use.
- With strong staking rates and upcoming upgrades, SOL is poised to test the $200 mark despite short-term resistance.
Solana (SOL) has been showing signs of strength, with its price gaining momentum in recent days. After months of sideways movement, SOL has recently surpassed the $180 mark, a level not seen since mid-February. In just the past day, the cryptocurrency surged by 6%, and it has gained over 22% in the last week. But what’s behind this sudden rise?
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Surge in DeFi Activity and Network Use
One of the key drivers of Solana’s recent price movement is the increasing activity within its decentralized finance (DeFi) ecosystem. Over the past two weeks, the total value locked (TVL) in Solana-based apps has surged from $7.5 billion to $9.6 billion, signaling greater usage of the network for staking, lending, and trading. Prominent projects such as Marinade, Jito, and Raydium have experienced massive growth, with their activity spiking by 60%, 44%, and 85%, respectively.
Additionally, trading volumes on decentralized exchanges (DEXs) based on Solana have also risen, with weekly volumes climbing from $18 billion to $22 billion. This increase in trading activity, coupled with higher network revenues and transaction fees, suggests a growing demand for SOL.
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Staking and Reduced Supply Push Price Up
Currently, about 65% of all SOL tokens are staked, which means they are locked up to secure the network and earn passive income. This reduces the available supply of SOL in the market, which, when coupled with rising demand, tends to push the price higher.
Moreover, there has been an uptick in open interest in Solana futures contracts, rising by over 11%. This suggests more traders are entering the market, betting on further price increases.
Resistance Levels and Short-Term Correction Risks
Despite the strong upward momentum, Solana faces some resistance at the $185 mark, with the relative strength index (RSI) now at 71, indicating that the asset might be overbought. This could lead to a short-term pullback or consolidation. If SOL fails to break through the $185 resistance, it might retrace toward the $157 or $130 support levels.
However, the technical outlook remains positive, as Solana is trading above its key moving averages, which all show bullish signals. If SOL manages to break through $185 with strong volume, a move towards the $200 mark could be within reach.
Looking ahead, Solana’s fundamentals remain solid. The growth in DeFi, rising network use, and upcoming upgrades such as Firedancer—which promises faster speeds and better stability—position SOL well for future gains. Furthermore, the possibility of ETF approvals and growing institutional interest are factors that could further propel the price.
At the time of writing, Solana is trading at around $182.95. Although it may face short-term resistance, the long-term outlook suggests that the $200 mark is within reach, provided the broader cryptocurrency market remains favorable.
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