Why is Solana (SOL) price up today?

NOIDA (CoinChapter.com)— Solana (SOL) has seen a significant price pump over the weekend, driven by a wave of bullish market sentiment. The bullrun ensured that the token’s price remained in the green despite a slight correction on July 22, which is one of the reasons why the Solana price is up today.

The overall cryptocurrency market is experiencing renewed optimism following recent political developments, including President Biden’s unexpected exit. The shift has fostered a positive outlook among investors since most market participants view Trump as being more crypto-friendly.

SOL’s price action reflected growing investor confidence, with traders and investors showing heightened interest in the asset. The token rallied nearly 19% since July 19 to reach $185 on July 21, the token’s highest level since May 20 earlier this year.

Several key metrics further underscore the bullish sentiment surrounding Solana, contributing to its current upward trajectory.

Rising Open Interest, Positive Funding Rates, and Network Growth

Several key factors contributed to the surge in Solana’s price. Firstly, the open interest in SOL futures has markedly increased, indicating a rise in trading activity.

For instance, data from Coinglass reveals that the open interest has been steadily climbing, suggesting that more traders are placing bets on SOL’s continued price appreciation. This increase in open interest is a strong indicator of bullish sentiment.

Additionally, the funding rate for SOL has turned positive, a typical sign of a bullish market. Positive funding rates mean that long positions are paying the short positions, reflecting traders’ optimism about SOL’s future price movements.

The shift in the funding rate aligns with the broader market’s positive outlook.

Furthermore, as independent analyst NekoZ highlighted in a tweet, the number of new addresses on the Solana network has reached a new record.

The surge in new addresses indicates robust user growth and increased adoption of the Solana network. More users and addresses typically lead to higher transaction volumes and greater demand for SOL, supporting its price increase.

Potential Bullish Breakout Could Be Why Solana Price Is Up Today

Another reason why Solana price is up today could be that the SOL is close to breaking out of a bullish technical setup called the ‘bull flag pattern.‘

A bull flag pattern forms when a crypto token’s price experiences a near-vertical rise, creating the flag pole. This pattern commonly emerges in assets that are in a strong uptrend.

Following the steep ascent, the asset undergoes a period of consolidation, which creates the flag of the pattern. Despite the initial strong rally, the price holds steady as buying pressure persists. Typically, a breakout from this consolidation phase triggers another significant uptrend.

The pattern reaches completion when the price breaks out from the flag area, effectively resuming the prior upward trajectory. Traders project the breakout’s price target by adding the length of the flag pole to the breakout price level.

According to the rules of technical analysis, if the token confirms the bullish technical pattern, SOL price might rally over 152% to reach the pattern’s theoretical price target near $451.

It is unlikely that the token will reach the pattern’s target price immediately after confirming it, but a breakout could help attract buyers to the market.

Messari Report Highlights Solana’s Strong Performance

A July 12 Messari report provided additional context to Solana’s bullish momentum. Key insights from the report highlight significant developments within the Solana ecosystem that are driving its current price surge.

One major factor is the continued institutional adoption, with giants like PayPal and Stripe integrating Solana for payments. This institutional interest underscores Solana’s strong potential and boosts investor confidence.

Moreover, the DeFi sector on Solana remains robust despite a 9% QoQ decline in USD-denominated TVL. Notably, DeFi TVL denominated in SOL grew by 26% QoQ, indicating strong internal growth. Raydium, a leading DeFi protocol on Solana, saw its average daily volume increase by 77% QoQ to $867 million, and its TVL grew by 46% QoQ to $991 million.

This growth in DeFi activity highlights the ecosystem’s vitality and supports the bullish outlook for SOL.

Additionally, technological advancements such as ZK compression by Light Protocol and Helius and the MagicBlock Engine by MagicBlock are enhancing Solana’s scalability and efficiency. These innovations make Solana more attractive for developers and users, further contributing to its bullish trajectory.

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