- SOL’s rise to $115 outpaces BNB in capitalization, driven by airdrops and affordable solutions versus competitors.
- Despite network outages, Solana implements upgrades quickly, maintaining confidence in its future capacity and scalability.
The price of Solana (SOL) has registered a 19% rise in the last week, generating expectations on whether it will reach $120. Although network analysis shows a lower performance against other chains, SOL followers remain confident in a continued increase in the value of this cryptocurrency.
This has catapulted SOL to a price of $115, positioning it as the third largest cryptocurrency by market capitalization, excluding stable coins. This meteoric rise has left behind BNB, which previously held this position.
However, the question arises as to whether these factors are enough to propel the price towards $120 or higher.
Experienced cryptocurrency investors often consider Ethereum rollup solutions to offer the scalability and cost reduction needed to keep investors in their network. However, new users are likely to find Solana’s user interface considerably simpler.
This argument gains strength especially for NFT launches and airdrops targeting more than 10,000 addresses, given that, at times of high demand, even second-layer solutions experience increases in transaction costs or delays.
The exchange platforms also paused deposits and withdrawals of SOL and Solana SPL tokens, limiting user interaction with DApps. Over the past two years, Solana’s network has faced twelve similar outages.
One positive aspect is that, through close coordination of software development, Solana can implement improvements and upgrades at a much faster pace than Ethereum Virtual Machine (EVM)-compatible networks.
While on Solana the development, testing and deployment of a new validator software solution may take a few hours, a similar effort could take years on the Ethereum mainnet. This efficiency in managing updates explains why the SOL token was not affected by the recent network downtime.
To assess whether SOL’s rise above $110 is sustainable, it becomes necessary to examine Solana’s network activity, which is often the main driver of SOL demand.
Initial analysis of DApps activity does not favor the Solana network, showing a 29% decrease in the number of active addresses and a slight 4% increase in volumes over the last 7 days.
In contrast, BNB Chain and Polygon saw their DApps volumes grow by almost 30%, according to DappRadar. Although Solana records much lower activity than BNB Chain, this should not necessarily alarm investors.
While the situation does not suggest an immediate risk of a drastic correction in SOL’s price, it does raise questions about the viability of surpassing $120 and reaching a subsequent valuation of $52.5 billion over the medium to long term .
SOL advocates are betting on the network’s processing capacity, evidenced by 91.4 million transactions in the last week, which could be decisive if DApps activity increases, driven or not by airdrops.
The price of SOL is currently trading at $111.
