Why Solana Price Did Not Drop Amid Downturn

Solana (SOL) is the only one of the top 10 altcoins by market capitalization whose price has increased in the past 24 hours. Top 10 rivals like Ethereum and XRP reported significant losses, while Bitcoin shed 7% of its value in the past 24 hours. 

SOL has increased by 2.94% to $174.38 in the past day, continuing the bullish trend, which has seen its value soar by 55% over the past month.

Why SOL Has Been on a Recent Tear

Solana’s price is up an astonishing 21% in the past week and 724.6% higher than a year ago. SOL’s performance has been closely tied to developments within its ecosystem. Its recent breach of the $170 level could catapult it towards retesting its all-time high of around $260.

The altcoin first showed signs of resurgence in late 2023 amid high developer interest and retention. The recent announcement of an Israeli Shekel-backed stablecoin, BILS, and the enhancement of liquidity through USDC stablecoin support have drawn users to the blockchain.

These innovations prepare the blockchain for the expected surge in real-world asset tokenization. Solana’s fast transaction times will help settle exchanges of certificates representing ownership of real-world assets.

Read more: What Is Solana (SOL)?

As a result, Solana’s weekly users grew from 432,000 to almost 800,000 in just over a week between February 26 and March 7, 2024—an 85% increase, suggesting a positive outlook held by investors and traders alike. This is despite the network’s history of outages and service disruptions that have occurred almost every year since its launch. The most recent Solana outage saw the block progression halt for roughly five hours on February 6.

SOL Growth Impressive, But Challenges Await

However, the recent glitch that stopped users of crypto exchange Coinbase from seeing correct balances suggests that such phenomena are part and parcel of increased blockchain activity. Binance’s recent suspension of support for Solana withdrawals was done to improve its infrastructure amid heightened volumes on Solana. But Bitcoin maximalist Max Keiser criticized the centralization of Solana’s infrastructure with its relatively small pool of validators.

“SOL is centralized garbage,” Keiser tweeted.

The network could also face competition from Ethereum following the successful Dencun upgrade that reduced transaction fees. Gas costs on major Ethereum layer-two networks like Zora and Base are approaching Solana’s levels only two days into the upgrade. The average transaction cost on Solana is $0.0017, according to Solscan, while the average transaction fees on Zora and Base are $0.002 and $0.055.

Read more: Solana (SOL) Price Prediction 2024/2025/2030

BeInCrypto contacted Solana Labs to comment on the recent rollout but has not heard back at press time. Ethereum co-founder Vitalik Buterin had also not responded to requests sent via X (formerly Twitter.)