Solana’s SOL token is now one of the largest cryptocurrencies by market value. It is thanks to growing institutional interest and the boom in non-fungible tokens (NFT) and decentralized finance (DeFi).
With the current price of $93, the token’s market capitalization sits at $26.86 billion, or the ninth-biggest in the crypto markets and ahead of polkadot’s $25.7 billion, per data source Messari. The cryptocurrency’s price reached a record high of $96 at the beginning of today and has more than doubled since Aug. 15.
Institutional SOL demand
“Institutional demand for SOL has increased in recent weeks.” Crypto financial services company Amber Group said. On Tuesday, Osprey Funds registered the Osprey Solana Trust with the U.S. securities regulators in a bid to give wealthy investors availability to the SOL token.
“Generally speaking, money has been flowing into Ethereum alternatives like Solana, Cosmos, Luna, and Avalanche.” Amber Group said. The tokens of these smart contract firms have each rallied by more than 80% against Ethereum’s native coin Ethereum over the past month.
SOL picked up a strong offer two weeks ago after Solana forayed into the booming non-fungible tokens (NFT) space with the start of Degenerate Ape Academy, a non-fungible token (NFT) project. It was a smash-hit debut, with a set of 10,000 unique pictures of cartoon apes sold in the first ten minutes. That made SOL higher as people required to buy the cryptocurrency to purchase apes.
“Once people bought SOL and experienced the speed and low transaction costs for themselves, they got more bullish.” Packy McCormick, the author of the Not Boring newsletter, said in a recent essay titled Solana Summer.
Token’s positive momentum
Other developments such as real-time data feeder Pyth Network’s debut on Solana’s Blockchain could have added to the token’s positive momentum.
An ongoing boom in NFT could bring more gains for SOL. Based on Amber Group, the theory of reflexivity or positive feedback loop looks like to play in the NFT market. “There is a supply crisis and opacity of price discovery. So price bands are wide, and gap up appears to be the trend for now,” Amber Group said.
From a technical analysis standpoint, the path of least resistance for SOL is on the higher side, based on Bill Noble, chief technical analyst at Token Metrics, a cryptocurrency research company, said. “The next upside targets are $89 (already flipped into support) and $145,” said. “This is, of course, contingent on the overall market staying positive.” ($145 is the 161.8% Fibonacci extension level.)
“Aside from a crash in the market, I don’t think anything is going to stop this coin.” Noble said. “Solana is probably going to be a big platform for both DeFi and NFTs.”
Katie Stockton, founder, and managing partner at Fairlead Strategies mentioned that charts don’t show any signs of uptrend exhaustion, and further gains could be in the making.
The cryptocurrency’s sharp increase from $70 to over $90 seen over the past two days has confirmed an upside breakout from a consolidation pattern. Per Stockton, the breakout has opened the doors for a long-term target near $126.
A bearish reversal would be confirmed if SOL prints two daily UTC closes under $70. “That might create a move back to the old high at $58,” Noble said.