What’s driving the surge in Solana prices?
Solana (SOL) has emerged as the top-performing cryptocurrency in recent times, surpassing Binance Coin (BNB) in terms of market capitalization. This rise in SOL’s value can be attributed to the growing interest in the Solana ecosystem and its technological capabilities.
Julian Deshler, co-founder of the Elusiv privacy protocol, which was launched on the Solana mainnet earlier this year, believes that SOL’s superiority over Ethereum lies in its fast and cost-effective transactions that eliminate the need for high gas fees. This has made Solana an attractive option for swaps and DeFi interactions.
SOL’s price has also been bolstered by partnerships with major companies like Visa and Shopify. Additionally, the excitement surrounding Solana’s BONK memecoin and the resurgence of the DeFi segment have attracted more people to the Solana ecosystem and increased liquidity.
Despite initial skepticism following the collapse of FTX, Solana has proven its resilience, thanks to its economic efficiency. Deshler sees Solana’s growth as a long-term trend and a formidable competition for Ethereum. The increasing hype is expected to attract more developers and liquidity to the ecosystem, especially with numerous projects offering additional potential for increased liquidity. Global hackathons scheduled for the upcoming year are likely to further enhance the project’s visibility.
SOL forecast: catching up and surpassing Ethereum
Looking at the SOL/ETH chart, it is evident that Ethereum outperformed Solana in the first half of the year. However, Solana’s rally gained momentum in the second half, with the price approaching its historical high around 0.055 ETH.
Elliott Wave analysis suggests that SOL is nearing the top of a five-wave bullish structure that began forming in June. The fifth wave, which is extended, is almost the same length as the first and third waves combined, indicating a potential top.
If the price tops out around 0.052 ETH, a correction could occur, resulting in a 35% drop to the nearest support at 0.032 ETH. On the other hand, if SOL closes above the all-time high area of 0.055 ETH, the rally could extend, leading to a 45% rise to the next resistance level at 0.072 ETH.
However, even in the event of a continued rally, Solana’s market capitalization would still be significantly smaller than Ethereum’s, which remains over five times larger.
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