Solana prices have soared in recent days as risk assets rallied.
Solana’s SOL token has rallied sharply in recent days, climbing to nearly $150 tonight as global markets recovered from their recent fear-driven selloff.
The digital currency, which serves as the native token of the high-performance Solana blockchain, hit $149.61 around 6 p.m. EST, according to Coinbase data provided by TradingView.
At this point, the SOL token, which has been rallying alongside many cryptocurrencies, was up about 35.8% after falling to near $110.00 yesterday morning, additional Coinbase figures from TradingView reveal.
Global markets rebound
These digital assets, along with major stock indices like the S&P 500 and Dow Jones Industrial Average, rebounded today after suffering steep losses over the weekend and early yesterday morning.
When explaining these latest moves in Solana’s SOL, as well as other digital currencies and stocks, several analysts said that the markets simply became oversold and then experienced a natural recovery.
Tim Enneking, Managing Partner at Psalion, pointed out that the latest market developments were largely driven by abrupt changes in market sentiment.
“This price roller coaster, of which Solana is just one example, albeit a notable one, is due solely to the fact that fiat markets react with irrational fear one day (the S&P was down 3% yesterday) and irrational relief the next day (the S&P was up 2.4% at one point today),” he said in emailed comments.
“Unfortunately, cryptocurrencies were the first to follow the first trend (BTC down over 15%, ETH down over 20% and crypto markets were crushed overall on Sunday) and fortunately, they were also the first to follow the recovery (with, for example, BTC up 10% yesterday while fiat stock markets were still reeling),” Enneking noted.
Brett Sifling, an investment advisor at Gerber Kawasaki Wealth & Investment Management, also spoke about broader trends in digital currencies.
“I don’t see any specific news regarding Solana that is driving the surge. I think Solana is most likely experiencing a recovery along with the broader crypto markets,” he said via email.
Solana’s optimistic scenario
Regardless of the volatility that the SOL token has experienced lately, it is benefiting from several bullish factors, a situation that several analysts have highlighted.
Pat Doyle, a blockchain researcher at digital asset data provider Amberdata, highlighted these variables.
“Despite recent volatility, Solana continues to demonstrate strong fundamentals,” he said in emailed comments.
“Key metrics such as active user growth, increasing dex volumes and overall ecosystem expansion reflect the underlying strength of the platform,” Doyle noted.
“Compared to ETH, Solana remains undervalued. Considering their respective market caps, Solana’s market cap is currently 22% of Ethereum’s,” he added, citing data recently pulled from CoinGecko.
“Given continued growth and adoption within the Solana ecosystem, I expect this percentage to increase over time, indicating the potential for significant value appreciation relative to ETH,” Doyle predicted.
Seth Ginns, Managing Partner and Head of Liquid Investments at CoinFund, also spoke about the many bullish factors surrounding the cryptocurrency.
“Solana is benefiting from a number of tailwinds. On-chain activity has been strong and new features and upgrades are expected to ship between now and the big Solana Breakpoint developer conference next month,” he said via email.
“It has also entered the mega-cap space that has trading confidence, so it trades as a low-risk asset that still has a lot of upside potential as its ecosystem grows,” Ginns added.
Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, EOS, and SOL.
