Solana is one of the top networks, commanding a market cap of over $81 billion, according to CoinMarketCap data. Even as crypto prices rise and sentiment improves, SOL has struggled for momentum.
Solana Retraces: Will Prices Break $200?
Over the past week of trading, market data shows that SOL is stable, posting a 3% dip over the previous 24 hours. The slide comes as Bitcoin, Ethereum, and Dogecoin march higher.
To put the numbers into perspective, Dogecoin is up 22% over the last week. Bitcoin has added 8% during that period, inching closer to March highs.
As SOL prices retreat from this week’s highs of nearly $185, CoinMarketCap experts note that Solana’s ecosystem is growing. At the same time, the number of daily active users continues to tick higher, an indicator of interest.
The uptrend has been solid over the past week. After prices collapsed in early September before quickly recovering, the uptrend has seen SOL rapidly increase. The coin added approximately 50% in the last two months, breaking above $150.
At spot rates, SOL remains within a bullish breakout formation. Even if the retracement pushes the coin lower, the local support will be at around $150. If buyers find support at this level, it may set the foundation for a fresh leg up, rising to the psychological round at $200.
Solana Price Drivers: Thriving Ecosystem, Institutional Support
Possible growth drivers include the active Solana ecosystem. Last week, daily active users rose to nearly 7 million. However, as prices retrace, the number is now around 5.5 million.
Most users are active meme coin traders on leading decentralized exchanges like Raydium and Jupiter.
Over the past few months, following the launch of Pump.fun in January, SOL has benefited from the tens of thousands of meme coins going live. Every launch requires the locking of SOL for liquidity, driving demand higher and lifting prices.
While meme coins are key to Solana’s evolution, the network also has a decent DeFi ecosystem. DeFiLlama data shows that its protocols manage over $6.2 billion, of which over 50% comprise stablecoins. Out of the $3.80 billion stablecoins in Solana, over 69% are USDC.
Top DeFi dapps include Jito, a liquidity staking protocol managing over $2.4 billion. Others include Solayer–a liquidity restaking solution– and Ondo Finance–a real-world asset (RWA) tokenization platform– controlling $275 million and $127 million, respectively.
Beyond the explosive on-chain growth, Solana could benefit from institutional backing. Robinhood, a trading platform, recently began offering SOL to EU clients.
At the same time, VanEck, one of the spot Bitcoin and Ethereum ETF issuers, released the first exchange-traded note (ETN) in Europe. The ETN will also offer staking rewards.
Feature image from Adobe Stock, chart from TradingView
