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SOL Price Stable After Recent Rally But Fundamentals Remain Robust

Short-Term Consolidation Follows Strong Gains

The price of SOL, the native cryptocurrency of the Solana blockchain, has stabilized around $112 following a correction from recent highs above $125 earlier this month (1). However, SOL prices are still up more than 60% since the start of July and over 430% from October’s lows.

The recent price rally for SOL has coincided with a broader crypto market uptrend fueled by expectations of looser U.S. monetary policy and potential approval of a Bitcoin ETF. However, increased network activity and demand for SOL have also contributed to its price rise.

Surge in Network Activity Drives Demand

SOL prices have climbed due to higher usage of the Solana blockchain, including growth of decentralized applications (DApps) and the newly launched Bonk! meme coin. On-chain metrics like the number of new addresses and non-vote transactions are nearing all-time highs, while daily network fees recently hit an all-time high of over $600,000.

Trading volumes on Solana-based DEXs have also temporarily surpassed those on Ethereum DEXs, highlighting the interest in SOL and its ecosystem (2).

SOL Fundamentals Point to Positive Trajectory

Looking ahead, analysts have mixed views on SOL’s short-term price potential, with some predicting a retracement to around $75 while others anticipate a test of April highs near $140. However, the fundamentals of the Solana blockchain, including its high throughput and low fees, suggest SOL could reach new all-time highs close to $260 by 2024.

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