3 reasons why Solana price may jump to $500 soon

Solana price has rebounded strongly after falling as low as $204 on December 11, indicating a more sustained recovery.

Solana (SOL) rose to $227 and its market cap rose to over $107 billion. This recovery mirrored the recovery of other cryptocurrencies, including Ripple (XRP) and Avalanche (AVAX). Here are three reasons why SOL price could rise above $500 soon:

Data shows that Solana is gradually decreasing as the number of tokens on exchanges continues to decrease. Nansen data shows that the amount of SOL tokens on exchanges dropped 13% in the last seven days to 282.24 million.

Solana tokens on exchanges | Source: Nansen

This decline is likely due to two factors. First, many investors move their cryptocurrencies to personal storage wallets. Second, a significant number of investors are staking SOL tokens. According to StakingRewards, Solana’s staking rate is 65%, higher than that of most cryptocurrencies such as Ethereum (ETH), Polkadot (DOT), and Cosmos (ATOM).

Second, Solana may continue to rise due to its role in the crypto industry. Data shows that protocols on the Solana network have traded $32.46 billion in transaction volume over the past seven days, surpassing Ethereum’s $25 billion.

In addition to its DEX dominance, Solana is also gaining traction in other areas of the crypto industry, including gaming and decentralized public infrastructure. This growth is translating into financial gains, with the network collecting over $672 million in fees this year.

Solana price techniques suggest further upside is possible Solana price chart | source: crypto.news

Third, technical data suggests that Solana price will move further up. On the daily chart, the cryptocurrency formed a bullish flag pattern, which occurs when an asset forms a long vertical line and a flag-like pattern. It is one of the most bullish formations in the market.

Solana also formed a breakout-retest pattern on Tuesday, dropping to $210. This was a significant level as it was the highest release in March this year. It is common for an asset to retest a key resistance or support level and then resume an uptrend.

On the weekly chart, SOL also formed a cup and handle formation with approximately 97% depth. With a 97% chance of $260 being predicted from the top of the cup, the price could potentially rise to $511 in the long term.