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Solana (SOL) is showing impressive momentum, currently trading at $226.17, up 0.7% in the last 24 hours. SOL is back in the spotlight as it has moved above a critical resistance zone of $215.
A sustained push above this level is likely to be the beginning of a massive rally toward higher highs, as highlighted by a crypto enthusiast today on the X platform.
By moving above its support level, Solana is gaining traction following the likes of Bitcoin, Ethereum, and XRP, which recovered above their key psychological support zones.
For the first time since the last bull run, Solana ($SOL) has flipped its FOMO-level price of $215 into support. Over the past year, this level acted as a strong resistance. Is this a sign of strength heading into the next cycle? 🤔 pic.twitter.com/kP2WTS87L8
— Lab4crypto (@Lab4crypto_) December 14, 2024
Solana momentum builds
Solana is depicting a rejuvenated price momentum as it challenges key support points. These crucial points have been demonstrated to be important for its next movement to higher levels.
In the past few weeks, Solana settled down to support zones between $202 and 208. Rebounding to the $215 level signals that SOL is likely to establish a new price milestone in the near term boosted by its broader adoption and on-chain developments.
In other words, revived bullish momentum and challenging major support levels are key factors that could push SOL to higher levels.
Surprising Reasons for Solana’s price movement
SOL price formed a robust recovery after falling to a low of $204 on December 11, showing signs of more sustained resurgence. The crypto surged to $226.20 today December 14, bringing its market cap to $108.54 billion. This revival is also seen in other crypto tokens, including BTC, ETH, LINK, AAVE, and many others.
Multiple reasons explain why Solana is likely to experience an impressive uptick to a higher price trajectory. Nansen metrics indicate that SOL is increasingly becoming scarce as the quantities of coins on exchanges continue to decrease. According to the data, the quantities of Solana coins on exchanges dropped by 13% in the past seven days to stand at 282.24 million. A decline in Solana supply on exchanges is an indicator that the SOL price is primed to rise, following the laws of demand and supply.
This phenomenon happens because numerous investors are transferring their tokens to self-custody wallets. Also, a huge number of users are staking their Solana tokens. According to data from crypto staking platform Staking Rewards, SOL’s staking ratio sits at 65%, higher than those of their cryptocurrencies like ETH (Ether), ATOM (Cosmos), and DOT (Polkadot).
Also, due to Solana’s role in the digital asset landscape, its value may continue to soar. Data indicates that protocols built on top of the Solana blockchain transacted $32.46 billion in trading volume over the last seven days, outperforming Ethereum’s $25 billion.
Solana’s demand is also expanding in other sectors of the crypto space, including DePin (decentralized physical infrastructure network), gaming, and DEX (decentralized exchanges). The network collected revenue fees of over $672 million from these sectors this year.