Since October 2023, Solana (SOL), often called the ethereal killerhas seen significant network growth and price action.
However, everything indicates that the most notable growth In recent months it has been on the price of SOL, which has risen more than 368% so far this year, taking the token from a low of $7.95 in 2022 to the now staggering figure of $64.20, with a annual maximum of $68.
But do these figures reflect fundamental growth or are there discrepancies between price action and network progress?
Network growth and price action fuel optimism
According According to Ally Zach, research analyst at Messari, SOL has seen significant growth from its December 2022 lows. SOL price has increased more than sixfold, while active addresses and total value locked (TVL) have increased. have doubled.
Initially positioned as a decentralized finance (DeFi) hub, Solana has diversified over time, introducing new infrastructure and tools, such as compressed non-fungible tokens (NFTs), which have led to the appearance of new consumer applications on the platform.
According to Zach's latest report, for most of 2023, consumer apps served as the primary entry point for new Solana users. However, the “breakpoint event” in early November reignited Solana’s DeFi sector.
A series of airdrop announcements for major projects in the ecosystem, particularly the JupiterExchange airdrop, propelled the DeFi sector to the forefront. These airdrops, along with the launch of new tokens, have increased the market caps and TVL of the decentralized exchange (DEX), attracting users through the trading potential of these tokens.
In particular, new Solana DEX users exhibit different behavioral patterns compared to airdrop farmers on other networks. Instead of high-frequency, low-volume transactions involving stablecoins, these users actively trade small- and mid-cap tokens and spend more per exchange.
This suggests a more sustained and engaged user base, moving away from transient agricultural practices. DEXs play a crucial role in the decentralized financial ecosystem, drawing their strength from the diversity and strength of surrounding applications and tokens.
Ally Zach's analysis suggests that Solana's newer user base, including newcomers and veterans, is moving away from typical air-farming behaviors.
This change indicates the potential for these users to become long-term contributors, strengthening the sustainability of the Solana ecosystem.
Potential Solana rally to $90 on the horizon
In addition to the potential long-term growth of the Solana network, the price of SOL is not far behind. Prominent crypto analyst Ali Martinez has identified an intriguing price pattern for SOL that indicates the potential for further gains soon.
Martinez highlights an ascending triangle formation on SOL's 12-hour chart, suggesting a continuation pattern that typically precedes upward price movements.
The formation of the ascending triangle implies that SOL price has been consolidating within an increasingly tight range, with higher lows and a resistance level around $68.2. If SOL manages to maintain a close above this critical level, it could trigger a bullish breakoutpotentially driving the price towards the $90 mark.
However, Martínez recommends caution and emphasizes the importance of monitoring the $60 support level. Any sign of weakness or breaking above this level can trigger increased profit-taking by traders, which could lead to a temporary drop in prices. In such a scenario, SOL could experience a drop, potentially reaching as low as $47.
Featured image from Shutterstock, chart from TradingView.com
