Why is Solana (SOL) price up today?
Solana’s rising demand today is driven by a declining Bitcoin market dominance, significant growth in Solana's network, and recent development updates.
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Collect this article as NFTSolana's (SOL) price is up today, posting gains as the broader cryptocurrency market recovers from the fears of Mt. Gox’s potential $9.40 billion in Bitcoin repayments. As of June 25, Solana’s price surged to as high as $140, an impressive 14% rise from its recent lows of $122, its lowest point in five weeks.
Solana rally part of altcoin gains versus Bitcoin
Solana's gains today appear on the backdrop of Bitcoin's declining crypto market dominance, reflecting that traders have been rotating their capital from BTC to top-ranking altcoins.
Notably, the Bitcoin Dominance Index (BTC.D) experienced a significant dip of 1.82% on June 25, the worst daily performance since January. This decline followed the announcement by the Mt. Gox trustee regarding the repayment of 850,000 BTC to the affected users of the crypto exchange's infamous 2014 hack.
The market viewed the Mt. Gox update as a sign of 850,000 BTC in potential sell-pressure emerging over the coming weeks, leading traders to shift focus to altcoins, including the SOL/BTC pair that is up 14.70% since the announcement.
Interestingly, SOL witnessed a rise in institutional interest even before the Mt. Gox retribution update. According to CoinShares' latest weekly report, Solana-based investment funds attracted a net positive inflow of $2.7 million in the week ending on June 21.
In comparison, Bitcoin-based investment funds witnessed a massive $630 million in outflows, while Ethereum—Solana's top layer-1 blockchain rival—saw $58.3 million leaving its funds.
Solana TVL highest since October 2022
Solana’s bullish momentum is paralleled by consistent growth in its network usage, as evidenced by the increasing total-value-locked (TVL) across its ecosystem.
As of June 25, Solana's ecosystem boasts 31.11 million SOL in its coffers, the highest since October 2022. This marks a staggering 300% increase in TVL this year and a remarkable 350% rise from its local low of around 9 million SOL in November 2023.
A higher TVL indicates that more users and developers are actively engaging with the Solana network, reflecting increased demand for the cryptocurrency.
It further enhances investor confidence by showcasing the network's robustness and growing adoption and generates positive sentiment that typically translates into higher buying interest, propelling the price upward.
Solana development updates
Today, SOL’s price gains follow the launch of two new features that allow on-chain transactions everywhere on the Internet.
Solana unveiled "Blinks" (blockchain links), a feature that integrates online transactions by transforming on-chain actions into shareable links.
Thus, users can initiate Solana transactions from any website or app where links can be shared. This feature enables activities such as voting, donating, minting NFTs, swapping tokens, and making payments directly on social media platforms.
Additionally, these Blinks can be shared on messaging apps and other online spaces. Integrating blockchain transactions into everyday internet activities promises to increase the usage of the Solana blockchain, thus positively impacting demand for SOL.
SOL price bounces from support confluence
From a technical perspective, today's SOL price gains are part of a recovery that started after testing a support confluence at around $130. This confluence comprises a 200-day exponential moving average (the red wave), a horizontal trendline, and an almost oversold daily relative strength index (RSI).
SOL now eyes a rebound toward its 50-day EMA (the red wave) at around $150 by the end of June. A decisive break above $150 could push the price toward $200, right around Solana's year-to-date high.
The bears, however, will try for a decisive break below the support confluence. This will risk crashing Solana price toward the psychological support level of $100 in July.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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