Solana (SOL), the high-speed blockchain network aiming to rival Ethereum, has shown promising signs in July, raising hopes for a surge past the psychologically important $200 mark. While the token experienced a pullback on Monday, analysts point to several factors that could fuel further gains.
Network Growth and Rising Demand
One key indicator for Solana’s health is the growth of active and new addresses on its network. According to data from Hellomoon, both metrics have seen a steady climb throughout July. This suggests increasing user activity and demand for SOL, which aligns with a bullish outlook.
Total Value Locked (TVL) on the Rise
Solana’s TVL, which represents the total value of cryptocurrencies locked within its DeFi (decentralized finance) protocols, has also seen a significant boost. DeFiLlama data shows an 18% increase in TVL this month, signifying growing trust and utility for the Solana blockchain among traders.
Meme Coin Frenzy Drives Activity
The recent US presidential election drama, including the shooting at former President Trump’s rally and President Biden’s withdrawal, has sparked a surge in activity for Solana-based meme coins. While some meme coins experienced significant price fluctuations, the overall trend reflects increased engagement with the Solana network.
Combined Crypto ETF on the Horizon
Industry experts like Nate Geraci, co-founder of the ETF Institute, predict the launch of a combined exchange-traded fund (ETF) for Bitcoin (BTC), Ethereum (ETH), and Solana within the next few months. This development could further bolster investor interest in Solana alongside established leaders in the crypto space.
Technical Analysis Hints at Potential Rally
An analysis of the SOL/USDT daily chart reveals a bullish trend for Solana since July 6th. The token has been forming higher highs and lows, suggesting a potential price increase of up to 17%. This could see SOL revisit its March peak of $210.18, erasing losses accumulated over the past three months.
Resistance Levels and Support Mechanisms
However, the path to $200 isn’t without hurdles. SOL faces resistance at $190.03 and $193.69, which represent key Fibonacci retracement levels. Additionally, the Fair Value Gap (FVG) presents another potential obstacle. On the downside, the 61.8% Fibonacci retracement level at $174.20 could act as support in case of a correction. The MACD momentum indicator further strengthens the bullish case, with its green bars indicating positive underlying momentum for Solana.
Conclusion
Solana’s network activity, rising TVL, and potential inclusion in a combined ETF all point towards a promising future. While technical analysis suggests a possible price surge, investors should remain cautious of potential resistance levels. Overall, Solana’s current trajectory paints a compelling picture for the high-speed blockchain network, making it a cryptocurrency to watch closely in the coming weeks.