Solana Prices Rally Over 30% in a Week Amid Strong Network Activity

The SOL token, which serves as the native digital asset of the high-performance Solana blockchain network, climbed to $188.37 late last night

Solana (SOL) prices have rallied over 30% in the last seven days amid strong activity on the high-performance blockchain network.

At the time of writing on May 21, the SOL token was trading at $178.00, up roughly 33% from $140.00 on May 14, CoinMarketCap figures showed.

The gains in SOL come as the broader cryptocurrency market has rallied over the last week, with the total crypto market capitalization rising from about $2.25 trillion to roughly $2.6 trillion.

Solana prices had climbed to as high as $188.37 late last night, before pulling back slightly. However, SOL was still trading at its highest levels since early April.

Solana Network Activity Buoying SOL Prices Analysts polled for this article largely attributed the latest gains in SOL to strong activity on the Solana network.

“There is a lot going on in the Solana ecosystem that could be contributing to the recent gains,” said Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, in emailed comments.

“Besides the general optimism for crypto and risk-on assets recently, Solana has also experienced a DeFi and meme-coin frenzy that has captivated the attention of traders and gamblers.”

Sifling added that the meme-coin craze on Solana is “very similar to the immense NFT growth that Solana fueled a few years ago.”

“It seems that speculators have turned their attention to these meme-coins in an effort to get-rich-quick,” he said.

“Since you need to buy Solana’s token SOL in order to buy these meme-coins, it seems that the token has benefited from the continued demand.”

Joe Lee, founder and CEO of DefiDive, also commented on the network activity and its impact on SOL prices.

“Earlier this year Solana’s price peaked at $202.37 on March 19th, driven by a significant influx of liquidity from traders seeking yield in the memecoin markets,” he noted.

“DefiDive's DeFi market data showed liquidity moving from Solana’s network to Base’s chain due to a significant drop in transaction fees following Ethereum’s (ETH) Dencun upgrade.”

Lee added that the upgrade, which was rolled out on March 13, “made the Base network the lowest-cost place to transact.”

“As a result, a large volume of memecoin trading shifted directly to the Base network, triggering a selloff of Solana, which was observed and tracked using TVL (Total Value Locked) data.”

However, Lee emphasized that market participants have been flocking back to the Solana platform more recently.

“Confidence in Solana has returned over the past two weeks following a period of uncertainty about whether Base would replace Solana in liquidity,” he stated.

“According to our data, Solana currently maintains $6.725 billion in TVL compared to Base’s $1.757 billion. Solana is currently gaining liquidity much faster than its competing layer 1 and layer 2 chains.”

Lee also highlighted a key staking announcement that trading platform Robinhood made earlier this month.

“In other macroeconomic indicators, Solana made headlines this week as Robinhood launched its first crypto staking product for European customers, featuring none other than the SOL token,” he noted.

Solana Price Outlook: $210 Target in 30 Days Going forward, Lee offered a bullish prediction for SOL prices.

“With strong underlying economics, our analysts have set a target for Solana’s price to reach $210 within the next 30 days,” he stated.

Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, also struck an optimistic tone when discussing the digital currency’s future prospects.

Describing SOL as “a favorite of many crypto investors,” he emphasized that the platform is user friendly and provides very fast transaction processing.

“This results in While Bitcoin (BTC) is about 6% off its all-time high, Solana is still about 30% off its all-time high of almost $260,” said DiPasquale.

“We believe it could climb further, but will find resistance at around the $200 line, which it wasn't able to convincingly cross earlier this year.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.