Solana Price Skyrockets Beyond Ethereum and Hits New ATH
2024-10-25
Solana (SOL) is back in the spotlight after this token reached a record high in its history compared to Ethereum (ETH). This significant increase in SOL prices has been going on since December 2022.
The upward trend stopped at the beginning of the year but has accelerated again since last September. Let's discuss the factors behind this trend and whether it will continue.
Solana Surpasses Ethereum
The SOL/ETH ratio has increased rapidly since its lowest point in December 2022. This increase led to a new record high of 0.069 ETH on October 24. Compared to the previous low, Solana managed to outperform Ethereum by 930%.
Despite this, price movements are still not completely clear.
- The indicator is Bullish: SOL successfully crossed the last horizontal resistance area at 0.053 ETH and confirmed the level as support (white line).
- Bearish Indication: Even though the price continues to reach new highs, the movement of SOL/ETH still follows the rising resistance trend line (black line). This trend line prevents wild price movements.
Technical indicators are leaning towards bullish, but have not shown a definite signal. The Relative Strength Index (RSI) indicator managed to break out of the bearish divergence trend line and showed an increase, almost approaching level 70.
However, the Moving Average Convergence/Divergence (MACD) has not crossed the bearish trend line and is showing a decline in momentum. Therefore, weekly timeframe readings cannot determine the direction of future trends with certainty.
SOL/ETH Weekly Chart | Source: Valdrin Tahiri/TradingView
Solana vs Ethereum
Looking at the metrics comparison between Solana and Ethereum, it can be seen that Solana is ahead in the total number of transactions and active users, but lags in Decentralized Exchange (DEX) volume. It's worth noting that the numbers for Ethereum cover its entire Layer-2.
If we compare Ethereum alone, the numbers are tighter, although Ethereum still leads with $167 billion in volume versus Solana's $154 billion. The gap between the two has narrowed in the past year.
DEX volume is interesting as Solana's meme coin platform, Pump.fun, continues to set record highs every day. This is likely driven by the rise in meme coins such as GOAT and POPCAT, which are both at all-time highs.
However, Raydium still comfortably leads Solana DEX volume. Since Solana has lower fees than Ethereum, DEXs on Solana have the potential to be more widely used in the future. The launch of Unichain, Uniswap's Layer-2, could also impact Ethereum DEX volumes.
Another factor that could help Solana outperform Ethereum is the massive increase in liquid staking. Solana's liquid staking market cap has increased from $500 million to over $4 billion in the past year.
This can contribute to increased activity on the network while allowing stakers to earn yield and rewards from their SOL staking.
Factors Driving SOL Price Increases
Several factors that drive the increase in SOL prices include:
- Increased adoption: The more people who use the Solana network, the higher the demand, which can push the price up.
- Ecosystem development: Solana continues to develop new ecosystems and applications, which can attract more users and investors.
- Market sentiment: The overall cryptocurrency market is bullish, which supports SOL price increases.
Solana Future Price Prediction
Source: Bitrue Market
Currently, the price of Solana is $177.39 with an increase of 3.47%. Previously, Solana had reached a price of more than $179 in the last 24 hours. Will this increase continue in the future?
While it is difficult to predict SOL's price with certainty, some analysts are optimistic about its long-term prospects. Moreover, several Solana indicators are currently giving positive signals.
Solana's RSI value is 73.79. Indeed, this is considered overbought, however, the SOL MACD line is experiencing a rapid increase so it is certain that it is and will be bullish in a less predictable time, it could be a long time if Solana developers provide their latest innovations for the community and SOL token holders.
Several factors that support analysts' optimistic views regarding Solana's price increase include:
- Market growth potential: The cryptocurrency market is still relatively new and has great growth potential. Solana, as one of the leading blockchains, could be one of the winners.
- Uses of tokens: The SOL token has utility in the Solana ecosystem, which may increase its demand.
- Community support: Solana has an active and enthusiastic community, which can support the growth of the project.
Read more about Solana (SOL):
Solana (SOL), Market Cap, Price Today & Chart History
SOL to USD: Convert Solana to US Dollar
Conclusion
Currently, Ethereum still leads in terms of security, as evidenced by the difference in revenue and TVL. However, the gap is getting smaller. Solana excels in almost all other metrics.
The future trend of SOL/ETH is still uncertain. However, Solana's outstanding performance and Ethereum's lagging behind on-chain metrics indicate Solana's potential to continue to catch up. Additionally, lower fees and a rapidly growing meme coin ecosystem could be supporting factors for Solana's positive trend.
FAQs About Solana
Q: Why is Solana compared to Ethereum?
A: Both are leading blockchain platforms competing to be the platform of choice in the blockchain industry. Solana is often considered a direct competitor to Ethereum because it offers higher scalability and lower transaction fees.
Q: What is meant by the SOL/ETH ratio?
A: The SOL/ETH ratio shows the price comparison between Solana (SOL) and Ethereum (ETH) tokens. The increase in this ratio indicates that Solana is outperforming Ethereum in terms of price performance.
Q: Why has Solana price increased significantly recently?
A: Solana's price increase was driven by several factors, including increasing adoption, ecosystem development, positive market sentiment, and the strong performance of the meme coin platform on Solana.
Q: Will the Solana price increase continue?
A: It is difficult to predict with certainty, but several technical indicators point to the potential for further upside. However, investing in cryptocurrencies always carries risks.
Q: What factors could influence Solana's price in the future?
A: Factors that may influence the price of Solana include technological developments, government regulations, competition from other blockchain platforms, and overall market sentiment.
Disclaimer: The content of this article does not constitute financial or investment advice.
