- Solana (SOL) price recently broke out of the resistance level around $160, and if it clears the next level around $190, it could sustain bullish momentum.
- The total value locked (TVL) on the Solana network has grown to a multi-year high, fueled by the rising demand for its meme coins.
- Solana’s on-chain activity has surpassed Ethereum, with more daily active addresses and higher DEX volume, threatening Ethereum’s dominance in the Web3 space.
The Solana network has shown impressive growth recently, outpacing Ethereum in several key web3 activity metrics. This is largely driven by the expansion of its meme coin ecosystem. With the right conditions, Solana could help kick off the next altcoin season.
Solana Price Action
Solana recently broke through resistance around $160. To keep momentum going, it needs to break through the next resistance level around $190. Backing this bullish outlook, Solana has established support above $128 over the last 7 months. This formed the base for the current breakout. Solana’s price has surged over 8% in the past two weeks, trading above $160 for the first time since July. While not yet in the clear, chances of testing its all-time high have increased significantly.
Macroeconomic Tailwinds
Broader crypto markets showing signs of strength, with Bitcoin correlated to gold prices. An anticipated Fed rate cut and the upcoming 2024 US elections could provide a catalyst.
Threat to Ethereum’s Web3 Dominance
The Solana network has grown into a vibrant web3 ecosystem, shrugging off the FTX implosion. Solana’s total value locked recently hit a 2022 high of $6.4 billion. Its stablecoin market cap exceeds $3.5 billion. Daily active addresses are around 762 million, dwarfing Ethereum’s 397k.
Growth of Meme Coins
Solana’s meme coin ecosystem exceeds $11 billion market cap and $2.5 billion daily volume. This activity has driven Solana’s DEX volume over $2 billion for three straight days, surpassing Ethereum. Token issuer Pumpfun nears $1 million in lifetime fees from 25 million launched meme coins. Meanwhile, Ethereum suffers from institutional outflows in spot Ether ETFs and lacks scaling solutions to compete.
Conclusion
Solana shows promise in triggering an altcoin surge, fueled by its rapidly expanding meme coin ecosystem. While dependent on Bitcoin’s moves, Solana is positioned to siphon activity from Ethereum as it struggles with institutional outflows and scaling issues. The next few weeks will determine if Solana can break past critical resistance levels and kick off the next altseason.
