Solana skyrockets over 60%: Is it heading to $450?

The price of Solana (SOL) surged over 60% from approximately $185 on January 13 to over $290 on January 19, before experiencing significant volatility, dropping to nearly $230 and then recovering to above $260. Notably, SOL is up 40% in a week.

This large price fluctuation can be attributed to the launch of a meme coin, $TRUMP, on Solana’s blockchain by President Donald Trump. This coin is now the largest meme coin on the Solana network, boasting a market capitalization of $10 billion. Consequently, SOL has ascended to become the world’s fifth-largest cryptocurrency, with a total market cap of $130 billion.

Dow futures rise 0.2%, Bitcoin smashes $109K pre-Trump orders

The cryptocurrency market has seen a rally following Trump’s victory in the U.S. presidential elections, as optimism grows that the new administration will adopt a friendly stance towards digital currencies. During a rally, Trump stated his intention to make the U.S. the “crypto capital” of the world, which has helped Bitcoin surpass the $100,000 milestone, more than doubling from $44,000 at the start of the year. Ripple’s XRP has also witnessed substantial gains.

The $TRUMP coin has experienced a remarkable 700% increase since its launch. In addition to this, First Lady Melania Trump has introduced the $MELANIA coin, which now has a market capitalization exceeding $1 billion. The purpose of the $TRUMP coin is to represent support for its associated values and symbolism. The official website clarifies that the meme coin is not intended as an investment product or security and is non-political.

The distribution of $TRUMP includes 10% for public access, another 10% reserved for liquidity, and 80% allocated to content creators and CIC Digital, connected to The Trump Organization. Solana itself serves as a platform for rapid, low-cost transactions and the development of decentralized applications. Alongside $TRUMP, notable coins on Solana’s platform include Raydium, Jupiter, and Bonk.

With Trump set to be sworn in as the 47th president of the U.S., he has appointed Paul Atkins, regarded as crypto-friendly, to lead the SEC, while David Sacks will serve as the AI & Crypto Czar. This is perceived as beneficial for the cryptocurrency sector.

Solana’s performance in the past week indicates that this breakout may signal the onset of a more extensive rally. Analysts anticipate further growth driven by the potential approval of an ETF for SOL, as asset managers such as Bitwise, VanEck, 21Shares, and Canary await a decision later this week. Although a Solana ETF may attract less investment than those for Bitcoin and Ethereum, its approval would enhance SOL’s market credibility and facilitate institutional investment.

Despite the impressive 40% increase in just a week, Solana’s price history over the years has been volatile. Returns for SOL have been 11,171% in 2021, -94% in 2022, 976% in 2023, and 78% in 2024, highlighting its considerable fluctuation compared to the S&P 500.

Starting the week with renewed recovery, Solana strives to achieve a new all-time high, potentially surpassing the $300 mark. Following a rebound from a bearish Sunday, during which Bitcoin marked a new all-time high at $109,000, Solana is witnessing robust demand.

After an intraday gain of nearly 7%, Solana rose to $270 after a dip from an all-time high of $295. Although it concluded Sunday with a 3.68% drop, the subsequent gain indicates a bullish engulfing candle, suggesting buyers are regaining control. With indications of a new bullish rally, speculation about surpassing the $300 mark is growing.

A review of the daily chart highlights a bullish breakout above a local resistance trendline, supported by a double-bottom reversal near the $175 mark. Buyers have maintained control above the 200 EMA line, contributing to an impressive 58% price increase over the past week, with the current market price rising nearly 60% from a low of $169.22.

The bullish rally has produced a series of consecutive bullish candles on the daily chart for the past week, despite the all-time high on Sunday, which closed on a bearish note, interrupting the bullish streak.

Technical indicators remain positive. The 50 and 20 EMA lines have crossed favorably, suggesting continued upward momentum. The daily RSI has entered the overbought zone, enhancing the validity of bullish forecasts.

Fibonacci levels indicate that upcoming price targets for Solana include $286 and $317, suggesting robust potential for surpassing the psychological $300 mark. Conversely, the critical support level remains at $244, aligning with the 78.60% Fibonacci level.

Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

Featured image credit: Solana/X