Explosive Solana Rally: Is $170 SOL Price Target Achievable as Crypto Markets Recover?

Solana (SOL) is turning heads in the crypto space once again! As the broader crypto market shows signs of recovery, Solana is leading the charge with an impressive 8% rally. But is this just a fleeting surge, or is there genuine potential for more SOL upside? Let’s dive into the key factors driving Solana’s momentum and explore whether a return to $170 is within reach.

Solana (SOL) Soars as Crypto Markets Show Signs of Life

The cryptocurrency market is breathing a sigh of relief, and Solana appears to be capitalizing on this renewed optimism. On March 19th, SOL experienced a significant 8% jump, mirroring positive movements in the US stock market. This surge comes as investors are leaning towards riskier assets, anticipating potentially dovish signals from the US Federal Reserve regarding future inflation. While interest rates are expected to remain steady, the market is keenly watching for any hints of a softer inflation outlook for 2025. This macro-economic backdrop, coupled with encouraging onchain metrics and derivatives data specific to Solana, is painting a potentially bullish picture for SOL.

Interestingly, Solana’s recent gains don’t seem to be tied to any specific, industry-exclusive news, such as the ongoing Ripple lawsuit saga. Instead, SOL’s performance is closely tracking broader market sentiment, as evidenced by its correlation with the Russell 2000 small-cap index futures. This suggests a healthy, market-wide recovery is underway, and Solana is positioned to benefit.

What’s Fueling the Solana Rally? Key Onchain Metrics Point to Strength

While overall decentralized application (DApp) activity has seen a slowdown across various networks, Solana is demonstrating remarkable resilience. Let’s examine the key onchain metrics that are contributing to the positive outlook for SOL:

• Total Value Locked (TVL) on the Rise: Despite a general dip in onchain volumes, Solana’s TVL – a crucial indicator of network deposits – has reached its highest point since July 2022. This signifies continued confidence in the Solana ecosystem and a steady influx of assets.
• Outperforming Peers in TVL Growth: Solana’s TVL increased by 10% in SOL terms in the past month, outpacing major competitors like BNB Chain and Tron. While BNB Chain saw a 6% TVL increase in BNB terms, Tron actually experienced an 8% decrease in TRX terms during the same period.
• Strong Performance in Key DApps: Platforms like Bybit Staking, Drift (a perpetual trading platform), and Fragmentic (a restaking app) are witnessing substantial growth in SOL deposits, indicating vibrant activity within the Solana ecosystem.
• Dominating DApp Fee Rankings: Several Solana-based DApps, including Pump.fun, Jupiter, Meteora, and Jito, are consistently ranking among the top 10 in terms of fees generated. Notably, Solana’s weekly base layer fees have even surpassed Ethereum’s, despite Ethereum’s significantly larger overall TVL.

These robust onchain metrics suggest that Solana is not just participating in a general market recovery, but is also exhibiting underlying strength and growing adoption within its network.

Derivatives Market Signals Potential for Further SOL Upside

Analyzing the derivatives market provides further insights into the potential for continued SOL upside. Despite a recent 27% price correction in SOL over the past month, the demand for leveraged positions remains balanced between buyers (longs) and sellers (shorts). This is reflected in the futures funding rate, which has not indicated a strong bearish sentiment.

Futures Funding Rate Explained:

Currently, the futures funding rate for SOL is hovering around neutral, suggesting that even after the recent price dip, bears are not aggressively increasing their leveraged short positions. This lack of strong bearish conviction can be interpreted as a positive signal for potential SOL upside.

Reduced SOL Supply Growth: Another Tailwind for Price?

Another factor that could contribute to SOL upside is the anticipated reduction in SOL supply growth. Similar to inflation in traditional economies, the rate at which new SOL tokens are introduced into circulation can impact price. While a significant 2.72 million SOL tokens are scheduled to be unlocked in April, the unlock amounts drastically decrease in May and June, with only 0.79 million tokens expected in each of those months. This reduced supply increase could create a more favorable supply-demand dynamic, potentially supporting price appreciation.

Is $170 the Next Stop for Solana?

Considering the confluence of factors – a recovering crypto market, robust onchain metrics showcasing Solana’s network strength, a balanced derivatives market without strong bearish pressure, and a decreasing rate of SOL supply growth – the potential for further SOL upside appears significant. Reclaiming the $170 level, last seen on March 3rd, seems increasingly plausible.

However, it’s crucial to remember that the cryptocurrency market is inherently volatile. While the indicators are currently favorable for Solana, market conditions can change rapidly. Investors should conduct thorough research and exercise caution before making any investment decisions.

Conclusion: Is Now the Time to Consider Solana (SOL)?

Solana’s recent 8% rally is more than just a flash in the pan. It’s underpinned by solid onchain growth, resilience in its DApp ecosystem, and positive signals from the derivatives market. As crypto markets recover and Solana’s network continues to mature, the potential for further SOL upside is definitely something to watch closely. Whether Solana can definitively break through and sustain a move towards $170 and beyond remains to be seen, but the current outlook is undeniably promising for this dynamic altcoin.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always conduct your own research and consult with a financial advisor before investing in cryptocurrencies.