Solana Sees 9% Gains While Rivals ETH, ADA & SUI Take Heavy Losses

The rising popularity of meme coins, the decision to launch $TRUMP on Solana, and the rapid expansion of this blockchain’s decentralized finance (DeFi) ecosystem may be fueling the demand for the SOL token.

Comparatively, the prices of Ether (ETH), Cardano (ADA), and Sui (SUI) have experienced losses of 19%, 19%, and 27% respectively in the past month.

The Solana-based Pump.fun protocol could be one of the projects responsible for the token’s positive performance. Data from Dune Analytics indicates that trading volumes in this platform alone in the past 14 days stood at $3.46 billion.

A total of 7.41 million meme coins have been launched through Pump.fun since its launch.

Meanwhile, the Solana-based decentralized exchange Raydium has benefited from this trend as the most successful meme coins launched through Pump.fun “graduate” to Raydium once they get enough liquidity.

Donald Trump’s victory in the November presidential election contributed to increasing Raydium’s platform fees above $100 million for the first time in its history as the public rushed to buy all kinds of cryptocurrencies.

Solana’s Monthly Performance Will Take a Hit After February 20

The Solana (SOL) daily price chart shows the important role that the launch of $TRUMP had on the token’s positive performance during this 30-day period as it propelled the price of the token to an all-time high.

However, those who bought at the top have seen nothing but losses. In the past 7 days alone, the token has shed nearly 8% of its value.

The most relevant area of support stands at around $170 and $175 from which the token has already bounced two times in the past few months.

Meanwhile, momentum indicators show early signs of a recovery but have not yet sent a concrete signal. In this regard, the MACD’s histogram shows steadily decreasing negative momentum readings while the Relative Strength Index (RSI) has gotten much closer to the signal line.

The next few days will produce the required data to assess where SOL could be headed in the next few weeks. A move above the RSI’s signal line paired with increasingly lower negative momentum readings should confirm a bullish outlook.

Staking Protocols Make SOL Less Volatile and Scarcer

Liquid staking protocols like Jito could also be mitigating the volatility of the Solana token as it has attracted nearly 160,000 holders who have staked a combined total of 15.4 million SOL tokens or around 3% of the token’s circulating supply.

According to data from the Solana Compass website, a total of 388.26 million or nearly 80% of SOL’s circulating supply is currently staked. This reduces the token’s volatility significantly and puts a cap on drawdowns as selling pressure is limited.

Meanwhile, as demand continues to increase amid the factors cited above, the Solana (SOL) token seems poised to keep delivering positive results down the road as its ecosystem is expanding rapidly while investors seem to be deeply committed to securing the network through staking.

In addition, the market seems to be certain that a Solana-linked spot exchange-traded fund (ETF) will be approved this year alongside other similar vehicles for utility tokens like XRP.

This would expand the token’s liquidity and may deepen its scarcity if staked percentages remain unchanged.