April 23, 2024

Why is Solana (SOL) price up today?

Coin Telegraph

Solana SOL $135 price is up today, buoyed by a modest recovery in the broader cryptocurrency market. SOL’s rebound follows the Bitcoin halving and easing geopolitical tensions in the Middle East.

Data from Cointelegraph Markets Pro and TradingView revealed that SOL’s price was $159, up approximately 4% in the last 24 hours and 32.6% from its local low of around $120, established a week ago.

SOL/USD daily chart. Source: TradingView

The smart contract token has performed well over the last few months, rising more than 88% over the last six months and 56% year-to-date. Its market capitalization is $70.6 billion, making it the fifth-largest crypto by market value.

Let’s look at the factors driving Solana price up today.

Solana’s network performance backs SOL price

The Solana network continues to be a force to reckon with in the layer 1 sector. Data from on-chain fundamentals platform Artemis reveals that Solana accounts for over 30% of daily transactions across major layer 1 and layer 2 networks.

Number of daily transactions on layer 1 and layer 2 networks. Source: Artemis

Solana’s high transaction activity has seen it outperform other top layer 1 protocols in terms of transaction fees. On-chain metrics tracker The Block Pro said,

“Solana emerged as the leading platform for on-chain financial activity, with its total transaction fees surging by approx. 417%, surpassing BNB Chain and Tron.”

Monthly change in transaction fees. Source: The Block Pro

Another metric used to gauge a blockchain network’s performance is the total value locked (TVL) in its smart contracts. Data from DefiLlama shows Solana’s TVL increased from $3.36 billion on April 18 to $4.02 billion on April 23, a 19% increase over the last seven days.

Total value locked on Solana. Source: DefiLlama

This uptick in TVL coincided with the increase in SOL’s price, which increased by more than 15% over the same period.

SOL’s technical setup points to a breakout

Solana price rally on April 23 is part of an ongoing recovery trend that began after the cryptocurrency found support from the $130 demand area on April 17. This upward trajectory has seen SOL reclaim a crucial support level provided by the 50-day exponential moving average (EMA) at $156.42.

Although the move is not decisive yet, a daily candlestick close above this level would show the bulls’ ability to sustain the recovery.

Notably, the MACD’s cross on April 23 is viewed as a buy signal, suggesting the asset may be undervalued and poised for a rebound.

BTC/USD daily chart. Source: TradingView

If this is the case, SOL/USD eyes a 28% recovery toward the neckline of the v-shaped recovery chart pattern at around $202 over the next few days.

Conversely, staying below the 50-day EMA increases the risk of correction toward its 100-day EMA support at $139 or the bottom of the governing chart pattern at $125.

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