Top 3 reasons Solana price rally has more room to go

The Solana price has regained momentum, jumping for five straight days and hitting its highest point since Dec.6.

Solana (SOL) surged to a high of $245 on Saturday, up 42% from its low point this month, bringing its valuation to $117 billion. It has become the fifth largest cryptocurrency after Bitcoin, Ethereum, Ripple and Tether.

Here are some of the key reasons why SOL rallied and why that rally is likely to continue.

Solana ecosystem growth

Solana has jumped due to the ongoing ecosystem growth. Its meme coins have grown and accumulated over $22 billion in market capitalization. The official Trump (TRUMP), as President-elect Donald Trump unveiled on January 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 largest player after Ethereum and Bitcoin.

Solana’s ecosystem can continue to grow due to its faster transaction speeds, lower costs, and the popularity of its decentralized Exchange network. Data shows that Solana’s DEX network handled $32.2 billion in the last seven days, higher than Ethereum’s $9.2 billion.

This growth has led to higher network charges, which a total of 820 million dollars in the last 365 days and $77 million this year. Some of these funds flow to Solana actors; they receive a dividend of 7%.

SOL ETF hopes are stable

The Solana price has also risen as investors anticipate the potential ETF approval from the Securities and Exchange Commission. ONE Polymarket polling places those odds at 77%, meaning the agency under Paul Atkins may be more open to approval.

A Solana ETF is likely to lead to more demand for the coin from institutional investors. This demand would be higher if the agency was open to allow these tokens to be staked. In a note this week, JPMorgan predicted that a Solana ETF would attract between $3 billion and $6 billion in its first year.

Solana’s pricing technique is supportive

The daily chart shows that the SOL token bounced back after forming a double bottom pattern at $175.42. It has now moved above the neckline of the pattern at $222.95, its January 6 swing high.

Solana, founded in 2020 by engineer Anatoly Yakovenko, remains above the rising trend line connecting the lowest swings since January 23 last year. It has remained above the 50-day moving average, while the Relative Strength Index has edged up.

Therefore, the Solana price is likely to continue to rise, a move that will be confirmed if the token rises above the key resistance of $264.15, its 2024 high.

Solana 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 fast and cheap transactions, attracting developers and investors. Throughout 2021, the network grew with several decentralized finance (DeFi) projects and non-fungible tokens on its platform.

Currently backed by big-name venture firms such as Andreessen Horowitz, Solana continues to enjoy rapid development via efficient blockchain solutions in the ever-growing crypto space.