Solana’s Remarkable Growth
Since October 2023, Solana (SOL), often referred to as the Ethereum killer, has witnessed substantial growth in both its network and price action.
However, the most noteworthy development in recent months has been in SOL’s price, surging over 368% year-to-date. It has risen from a low of $7.95 in 2022 to an impressive $64.20, hitting an annual high of $68.
But the question remains: Are these numbers indicative of fundamental growth, or are there disparities between price action and network progress?
Optimism Fueled by Growth in Network and Price Action
According to Ally Zach, a research analyst at Messari, SOL has experienced significant growth since its December 2022 lows. The price of SOL has increased over sixfold, with active addresses and Total Value Locked (TVL) doubling.
Initially positioned as a decentralized finance (DeFi) hub, Solana has diversified over time, introducing new infrastructure and tools like compressed non-fungible tokens (NFTs). These innovations have led to the emergence of new consumer applications on the platform.
Zach’s latest report reveals that throughout most of 2023, consumer apps served as the primary entry point for first-time users on Solana. However, a “breakpoint event” in early November reignited Solana’s DeFi sector, driven by a series of airdrop announcements for major projects, particularly the airdrop by JupiterExchange.
These airdrops, along with new token launches, have boosted market caps and decentralized exchange (DEX) TVL, attracting users through the trading potential of these tokens.
Notably, Solana’s new DEX users exhibit different behavioral patterns compared to airdrop farmers on other networks, suggesting a more sustained and engaged user base.
Ally Zach’s analysis indicates that Solana’s newest user base, including newcomers and veterans, is shifting away from typical airdrop farming behaviors, potentially strengthening the sustainability of the Solana ecosystem.
Potential Solana Rally To $90 On The Horizon
In addition to the potential long-term growth of the Solana network, the price of SOL is showing promise. Crypto analyst Ali Martinez has identified an ascending triangle formation on the 12-hour chart of SOL, suggesting a continuation pattern that typically precedes upward price movements.
The ascending triangle formation implies that SOL’s price has been consolidating within a tightening range, with higher lows and a resistance level of around $68.2. If SOL manages to sustain a close above this critical level, it could trigger a bullish breakout, potentially propelling the price toward the $90 mark.
Martinez advises caution and emphasizes the importance of monitoring the $60 support level. Any signs of weakness or a breach of this level may trigger a spike in profit-taking by traders, potentially leading to a temporary price decline. In such a scenario, SOL could experience a dip, potentially reaching as low as $47.
