The crypto rally in recent months has helped the global crypto market cap surge to over $2.53 trillion. The bullish sentiments in Bitcoin’s movements have led the rally, although altcoins have also registered significant gains. Amidst the market optimism, the Solana rally has become one of the highlights for all stakeholders. After a period of over two years, the Solana price finally breached $200!
What led to the Solana price rally? Will it continue throughout 2024 and beyond? Read ahead as we describe all the main reasons that could have factored in helping Solana turn highly bullish!
The Solana Price rally: What happened on March 18?
Just a month ago, the crypto market cap was at the cusp of crossing $2 trillion, while Bitcoin was trading relatively lower at around $51,000, gearing up for a rally. In the mean time, the Solana price range gradually started expanding in the later months of 2023, from a trading level of approximately $20 in September 2023.
The above chart represents Solana’s trajectory over the past year. As we can see, Solana’s upward movements started around October 2023.
By the end of February 2024, the Solana rally had consolidated, with SOL trading comfortably above $100.
The larger gains have emerged only in the last thirty days, as we can deduce from the above SOL/USD 1-month price chart.
SOL saw over 60% returns in the last thirty days, reaching the $200 mark on March 18. It traded at these levels after a gap of 26 months, reversing the trends of the last couple of years. In the last 12 months alone, SOL has hiked its returns by 690%.
Although there were days in the last month when it traded sideways or even shed losses, the broader rally stayed intact.
Reasons behind the Solana price rally
Let’s recount the reasons which could have led to the Solana price rally:
Memecoins rally:
The latest crypto rally resulted in considerable gains in memecoins. As a result, memecoins on the Solana blockchain also rallied, creating a surge in SOL. Trading volumes in the Solana blockchain have largely increased, with memecoins such as Snap, Dogwifhat, Slerp, and others registering huge volumes.
A new dogwifhat campaign also led to the Solana rally gaining momentum recently. The relation between memecoins and their native networks was described in detail by an analysis by global asset management firm Franklin Templeton as well.
A few other reasons, such as the Solana blockchain’s comparatively lower fees, have made it an ideal platform for launching memecoins. Moreover, people need to deposit money in Solana and use the SOL token to trade these memecoins. Thus, transaction activity for the SOL tokens has increased, creating a Solana price rally.
Technical breakout:
In January 2024, Solana tested a likely bull flag pattern’s upper trendline. The bull flag had indicated a technical breakout for Solana towards $200 at the time. Based on its current trend, Solana could also trade within the $195-$200 trading range by the end of March. A price correction is also possible, as Solana has retraced from $200 by now. However, the Solana price rally over the last month was evident from bullish technical patterns emerging in February.
Anticipation for a Solana ETF:
Franklin Templeton took to social media in January 2024 to praise the Solana blockchain, mentioning its numerous use cases. This led to a social media frenzy about ‘probable’ Solana exchange-traded funds (ETFs). Social media users started anticipating a Solana ETF since Franklin Templeton is one of the largest and most reputed global fund houses.
The US spot Bitcoin ETFs also received their approvals around the same time, leading to higher speculation regarding a Solana ETF. This could have contributed to the Solana rally.
Strong fundamentals:
The Solana blockchain’s fundamentals have been recognized in the blockchain space, while its network adoption has also increased. The circulating supply of SOL tokens may decrease gradually if the blockchain’s total value-locked (TVL) increases.
In the fourth quarter of 2023, a leading crypto analysis firm reported encouraging numbers for Solana, with sustained growth. Its DeFI TVL also rose, which could have led to higher demand for SOL.
General bullish sentiments in the crypto market:
The crypto rally has been fueled by factors such as the upcoming Bitcoin-halving event and higher inflows through the spot Bitcoin ETFs. The market is broadly bullish currently, and its effects could have spilled over to SOL as well.
An altcoin rally in the crypto market has also emerged along with Bitcoin’s rise, which may have contributed to the Solana price rally.
The path ahead for Solana
Payment majors like Visa and corporations like Shopify have previously leveraged the Solana blockchain for its multiple use cases. Thus, Solana’s importance is well-established in the crypto space.
The price trajectory of SOL in 2024 could continue to be influenced by the above reasons, coupled with developments in the blockchain platform. It could rise above $200 again and hit a new all-time peak!
Join Millionero to start trading crypto with our list of user-friendly features! Our blog also explores the latest updates in the crypto sector through news reports and articles- check it out!