Solana price is ripe for a breakout as ecosystem booms

Solana’s price rally has gained significant momentum, as its ecosystem and on-chain metrics continue to show strong performance. The Solana (SOL) token recently rose to $180, marking its highest level since July 31. This surge represents a 60% increase from its lowest point on August 8, a time when many assets experienced declines due to the unwinding of the Japanese yen carry trade.

Notably, Solana has outperformed its biggest competitor, Ethereum (ETH), which has only seen a 20% increase since its August lows.

A major driving force behind Solana’s impressive performance is its success in the meme coin market. According to CoinGecko, the collective market cap of Solana-based meme coins has surpassed $11.7 billion. Leading the charge is Dogwifhat, the largest meme coin in Solana’s ecosystem, with a market cap of $2.5 billion. Other notable meme coins like Bonk and Popcat have also crossed the $1 billion market cap mark, with Cat in a Dog’s World approaching that milestone.

Further fueling Solana’s growth, data from Blockworks Research indicates that Solana’s Real Economic Value—comprising transaction fees and maximal extractable value—hit a record high on October 25.

Solana’s ecosystem continues to show robust growth, with additional data highlighting its dominance in several key areas. According to DeFi Llama, the total value locked (TVL) in Solana has surged by 23% over the past 30 days, reaching $6.4 billion. In comparison, Ethereum’s TVL has decreased by 2.1%, while Tron saw a sharper decline of 11.5%.

Solana has also cemented its position as the leader in the decentralized exchange (DEX) space. Its DEX networks, especially Raydium, have processed tokens worth $16 billion this month, surpassing the combined value of Ethereum and Base. Solana’s monthly DEX volume reached $41.7 billion, outpacing Ethereum’s $32 billion.

The derivatives market has followed a similar trend, with Solana-based decentralized applications handling $4.6 billion worth of tokens over the past week.

One of the main reasons for Solana’s success is its superior speed and low transaction costs, which continue to attract developers. Data from Dune Analytics reveals that Solana’s network has seen usage by almost 200,000 unique users in the past two weeks, a significant increase compared to Ethereum’s 52,000 users during the same period. This highlights Solana’s growing appeal as a blockchain of choice for developers and users alike.

Solana chart points to more gains

The weekly chart for Solana (SOL) indicates strong upward momentum, with the token rising for three consecutive weeks, supported by significant growth within its ecosystem.

Solana has recently tested the upper boundary of a descending trendline that has connected the highest price swings since March, suggesting a potential breakout from this resistance level. Additionally, the token has formed a bullish flag pattern, a technical formation that often signals further price gains when the price breaks upward.

SOL has also remained above the 50-week moving average, showing positive long-term market sentiment. The token’s price action has formed a rounded bottom, or cup and handle pattern, which is another bullish technical indicator.

Given these factors, Solana is likely to experience a bullish breakout. The initial target for SOL could be around $210, approximately 20% above its current price, as the technical setup points to further upward potential in the coming weeks.