What Pushed Solana Prices To A Fresh, All-Time High Today?

What Pushed Solana Prices To A Fresh, All-Time High Today?

Solana’s sol token has been on fire lately, reaching a string of fresh, all-time highs in recent months as the platform generates widespread visibility.

The digital currency climbed to $219.11 earlier today, according to Messari data.

By this point, the cryptocurrency had risen more than 13,500% in 2021, additional Messari figures reveal.

The digital asset pulled back shortly after, trading closer to $212 at the time of this writing.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

It is notable that the sol token reached its latest record the same day that the total value locked (TVL) into DeFi projects built on the Solana platform hit an all-time high, according to data source DefiLlama. At the time of this writing, the TVL figure had reached $13.67 billion.

Further, the digital currency increased in value at the same time that it, and other layer 1 tokens, were moving higher along with bitcoin, a development reported on by CoinDesk and Cointelegraph.

However, when asked to explain sol’s latest price movements, analysts who contributed to this article highlighted a range of bullish factors.

“Solana continues to move up for several reasons,” said Tim Enneking, managing director of Digital Capital Management.

“It’s a legitimate participant in the NFT market (as opposed to a ‘hype participant’ as every token tries to claim some sort of affiliation with NFT to goose its price),” he stated.

Further, Solana is capable of providing what Ethereum “has been promising literally for years (PoS, low transaction fees, greater scalability, etc.).”

Past that, the association it has with cryptocurrency exchange FTX is providing a tailwind.

Finally, “the percentage growth of Solana (by virtually any metric: TVL, Twitter mentions, community size, etc.) is orders of magnitude above that of ETH.”

In addition, Enneking pointed to exchange data.

“Perhaps the strongest metric today is that $10M in long leverage positions opened on Bitfinex in the last 20 hours, while $4.5M of shorts closed,” he stated.

“A net $15M improvement in margin positions on a single exchange is massive – and telling.”

“All of this simply leads one to the conclusion that the potential upside for SOL is greater than the potential upside for ETH – even if ETH looks to hit a new ATH shortly,” said Enneking.

Konstantin Anissimov, executive director at CEX.IO, also weighed in, speaking to the Solana’s merits.

The platform has a unique value proposition, “which creates solid competition for Ethereum and other L1 blockchains on which projects can build DeFi solutions,” he stated.

“Solana offers very fast execution with fees of less than $0.01. This coupled with a very active development community and generous developer grants to further incentivise innovation lays out a path of success.”

However, he spoke to the competition posed by the Ethereum platform.

“Solana is not the only L1 blockchain project with such a promising future.”

“And we should also not forget about the dominance of Ethereum in the space, no matter what the fees and execution speed are.”

Anissimov also commented on the observation that the sol token followed bitcoin higher, emphasizing that “top cryptocurrencies” usually display this kind of correlation with the world’s most prominent digital currency.

Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, elaborated on this development, offering further detail.

“At the moment traders are seeking relatively safer altcoins since BTC’s future moves remain uncertain,” he stated.

“Without there being a full-fledged ‘altseason’ it is natural for traders to go for assets that have performed well over the last few months and have shown that they can move independent of Bitcoin to some extent,” said DiPasquale.

“Solana ranks top among these while others include DOT, LUNA and ATOM etc.”

“We can expect these blue chips of sorts to perform well until the market feels confident enough to pour capital into riskier altcoins.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.

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