Solana (SOL) has been ahead of the rest of the crypto market when it comes to gains. The market had seen renewed interest following the holidays which led to a small recovery here and there especially for the large players but Solana had been able to break completely from the trend and record double-digit gains in the last couple of days.
What Is Driving Solana’s Growth?
Despite being at the forefront of massive FUD that has dragged its price down toward two-year lows, Solana has now been able to recover a good amount of gains over the last few days. While the comments from Ethereum founder Vitalik Buterin in support of the blockchain had helped, there was another factor pushing the price higher.
A new meme coin known as BONK had graced the Solana ecosystem and after being airdropped to holders of major NFT projects, the price of the meme coin had soared. The resulting gains would see investors FOMO into the cryptocurrency and since they needed to trade on the Solana network, the price of SOL had surged given all of the new attention it was receiving.
In two days, SOL ballooned to become one of the best performers in the space coming into the new year. It is up over 16% in the last 24 hours alone and the price of the digital asset has moved from the loss territory into the green over the last week. It is now sitting at almost 37% gains for investors over this time period, according to data from Coinmarketcap.
Can SOL Hold The Gains?
Right now, the growth of SOL in the market is still largely driven by the FOMO triggered by the BONK meme coin. Since the hype around this coin has been waxing strong, it is expected that interest will remain high among investors, thereby sustaining the growth trend recorded by Solana.
However, it is important to keep in mind that the BONK cryptocurrency is largely driven by hype, and just like any other meme coin, it is expected that this hype would die down at some point. Now, once this happens, the decline in interest would also significantly impact the price of SOL, dragging it down along with it. That is unless something else comes up to drive the price of SOL higher.
It is also expected that some profit-taking would begin, where investors would begin to dump SOL to claim the gains already being seen. This, as well, will contribute to a wind-down, and a downward correction would follow. But this correction is not expected to claim more than 10% of current profits given that the price of SOL is now trading above its 20-day moving average of $12.3.
SOL is changing hands at $13.72 at the time of this writing. It has overtaken Shiba Inu to become the 15th largest cryptocurrency with a market cap of $5.04 billion.