Wednesday, September 28

Solana hits a record high with the price of SOL rising more than 218% in six weeks. What’s behind the rally?


Solana (SOL) prices marked another milestone of nearly $ 85 on Aug. 27 as traders evaluated a number of bullish fundamentals, including Solana’s possible foray into Wall Street.

On August 24, digital asset management company Osprey Funds registered a one-of-a-kind Solana fund with the United States Securities and Exchange Commission (SEC). In doing so, the New York firm hinted to provide institutional exposure to SOL markets, as the token’s value increased by more than 4,300% in 2021.

One day later, the Pyth Network real-time data feed Announced which will be activated on Solana’s proof-of-stake blockchain. The company provides “high fidelity streaming data” from trading companies and exchanges, allowing it to cover global market activity without relying on a single data source.

Pyth will use Solana’s “Wormhole” cross-chain communication protocol to transmit market data with decentralized applications running on the Ethereum, Binance Smart Chain and Terra blockchains.

The uplifting events helped the SOL / USD exchange rate rise to an all-time high of $ 84.96 on Friday, an increase of more than 218% in six weeks of trading.

Solana daily price chart. Source: TradingView.com

SOL bulls see prospects for higher demand

Traders apparently raised their bids for the pair, anticipating that its foray into Wall Street, coupled with adoption in the decentralized finance (DeFi) sector, would boost demand for SOL tokens in the future.

This is mainly due to the fact that SOL handles two main cases in the Solana network. First, users can stake their SOL holdings directly on the network or by delegating them to an active validator to secure the blockchain. In return, stakeholders receive inflationary rewards proportional to your betting balance.

Second, users can use SOL as fees to transact or execute smart contracts. Therefore, the more projects are implemented in the Solana ecosystem, the greater the promise to drive demand for SOL tokens.

The previous weeks witnessed continued growth in the Solana ecosystem. For example, Solana successfully entered the non-fungible token (NFT) sector in mid-August with the launch of Degenerate Apes. The project saw a collection of the 10,000 comic ape images sold out in just eight minutes.

Related: Solana Price Soars To New Highs With Launch Of DeFi Project, $ 70 Million DEX Financing

As it happened, the total trading volume reached almost 96,000 SOL (more than $ 5.9 million at the time).

SOL / USD technical setup

Solana’s latest bullish move has led him to test an upward sloping trend line as resistance, constituting an Ascending Channel, as shown in the chart below.

SOL / USD 4H chart with a rising channel setup. Source: TradingView.com

The SOL / USD price rally has decelerated near the upper trend line of the Channel, awaiting a bullish breakout or a pullback towards the lower trend line of the Channel, with the exponential moving average 50-4H (the velvet wave) near $ 72.14 as an interim support target.

Meanwhile, the daily SOL / USD chart is also warning of possible downside risks due to overbought relative strength readings (RSI above 70). However, strong fundamentals could continue to provide bullish support even in the face of interim price corrections.

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