What's Behind Today's Surge in Solana (SOL) Price?

What’s Behind Today’s Surge in Solana (SOL) Price?

Solana’s (SOL) Price Surge

Solana’s (SOL) price has surged, buoyed by a wave of buying sentiment across the cryptocurrency market. Notably, on March 14, SOL’s price jumped approximately 6.70% to $174, its highest level since January 2022. In doing so, the cryptocurrency fared better than the overall crypto market, which dropped 0.25% on the same day.

Reasons Behind Solana’s Price Surge

Following are the core reasons behind Solana’s impressive price rally on March 14:

  • Memecoin Mania Boosts Solana Network Activity: Solana’s recent uptick in value and the notable gains over the past day coincide with the buzz generated by its associated memecoin project, Dogewhatif (WIF). Notably, WIF supporters successfully funded $700,000 against their target of $50,000. They used the proceeds to feature the token’s logo on the Las Vegas sphere. Dogwifhat’s (WIF) price surged by 25%, hitting a new high of over $3 and reaching a market cap of $3 billion after the campaign. Interestingly, Solana’s price started rallying shortly after the announcement of the Dogwifhat campaign on March 10. SOL price has risen by more than 24% ever since, picking momentum specifically after the successful WIF crowdfund. Solana bulls have lately responded positively to the launch of memecoin projects on its blockchain, with a recent Franklin Templeton research noting that the network captured a large percent of activity of all the active addresses during the same time that [its native memecoin] BONK saw a price surge in Q4/2023. Such events contribute to speculation around the potential for increased SOL demand as the Solana platform sees more activity with decentralized applications (DApps) and transactions.
  • Capital Rotation from Bitcoin: Solana’s price jump today is part of its prevailing rebound move against Bitcoin. Notably, the SOL/BTC pair has jumped 32.45% after hitting a local low of 0.0017 BTC earlier this month. That includes a 6.60% rise on March 14, showing that investors have been rotating their capital out of the Bitcoin market to seek safety in Solana. Bitcoin has already rallied 65% so far this year, with its daily relative strength index (RSI) signaling overbought conditions. Simply put, trader may be viewing BTC as riskier at this point than altcoins that have not yet caught up. In contrast, altcoins like Solana and XRP recently exhibited relatively lower RSI readings, suggesting a more balanced market sentiment for these assets.
  • Technical Breakout Underway: Solana’s price gains today are also part of a technical breakout — a scenario anticipated by Cointelegraph’s analysis from January. The $195-200 area is the next target by March’s end with SOL’s price breaking out of a bull flag structure. Nonetheless, Solana’s RSI reading is now overbought after the recent rally, raising the chances of a price correction before its technical upside targets are reached. On the weekly chart, for instance, SOL’s RSI sits near 82, the most overbought since December 2023. In such a correction, SOL will risk falling toward its 0.5 Fibonacci retracement level at $135 in March or April, down approximately 20% from current price levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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