Solana price has recovered, with the entire crypto market gaining 4.5% in the last 24 hours and briefly surpassing $150 before retracing to its current price of $149. Further, the SOL price has broken out against Ethereum, which is usually a precursor for outperformance moving forward. This is despite numerous accusations claiming Solana is centralized. What’s next for the solana?
Why is Solana Price Breaking Out Against Ethereum?
SOL price has constantly outperformed Ethereum in the last year. Solana is up 4.29%, while ETH price is down 18.46% compared to a year ago. Some reasons for Solana’s superior performance include the explosion of meme coins on the chain due to Pump.fun, and the constant low fees and high network speeds, even during periods of extremely high network activity.
On the other hand, Ethereum has also contributed to pushing Solana price higher by constantly registering negative net flows on its U.S. spot ETF and not fixing the high fees and slow network speeds. These factors make Solana look like the go-to destination chain.
Data from DeFiLlama shows how Ethereum share of the total TVL dropped from 62.38% to 54.94% from the week of July 23, 2024, when the spot ETF began trading. On the other hand, Solana’s share increased from 4.14% to 6.56% in the same duration. This shows how the negative ETF volumes have affected investors’ confidence in the network, driving value into the rival chain, Solana.
Consequently, SOL price has increased by 6.39% since June 20, while Ethereum has dropped 30.13%
Further, Ethereum has been criticized by the likes of Cyber Capital CIO Justin Bons, who claims the network Ethereum L2’s are sucking the life out of the L1 mainnet.
SOL Price Analysis: Is $180 The Next Stop?
Solana price shows an inverse head-and-shoulders pattern, a strong bullish reversal signal. The price is approaching the neckline around $160, and a breakout above this level would confirm the reversal. The market has shifted from a previous downtrend, and the price action shows a buildup toward the right shoulder, indicating that bulls are gaining strength.
Solana price prediction shows the asset may find resistance at the neckline of the inverse head and shoulders pattern ($160) and higher at $180 if the neckline is broken. Longer-term resistance lies around $200, projected from the height of the inverse head and shoulders pattern.
Moreover, the Solana price has broken out against the Ethereum price and shows signs of gaining 18% against its rival. This may cause more investors to flee Ethereum to Solana, causing its TVL and price to surge even higher.
If the SOL price fails to break above the neckline, it may show market weakness, causing it to fall to $148, the immediate support on which the price recently bounced, forming the right shoulder.
Further selling pressure may push the price lower to $140, which markets the most recent two-month low. Below this $110 is the longer-term support level.
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