Solana's native token, SOL, has been soaring lately, reaching new All Time Highs. This price surge can be attributed to a combination of factors, including an increase in DApp usage, investor interest, and a few other key drivers. The other key driver could also be good old  fear of missing out (FOMO), although institutional support may also contribute.

Solana Annual Price Evolution

One of the possible primary causes of the recent price increase is the ongoing sale of SOL tokens by FTX's bankruptcy estate. In September 2023, the Delaware Bankruptcy Court approved the liquidation of the failed exchange's assets, including 55.75 million SOL. Though the impact of these sales on SOL's price was worrying at first, investor enthusiasm for SOL's price increase has grown as they realize that some of the tokens from the bankruptcy proceedings are either vested or locked. In addition, a weekly sale limit of $100 million has been imposed as part of the FTX liquidation plan hence limiting supply, if you see where this is going. As a result, the initial fear of asset liquidation has given way to hope as investors recognize the limited impact of the sales.

Leverage longs effect on Solana

Another factor contributing to the price increase is the strong demand for leverage longs. SOL's substantial 39% weekly gains have pushed its futures open interest to $745 million, the highest level since November 2021, when SOL achieved its all-time high of $260. While it's possible to argue that the derivatives market is primarily driving SOL's rally, there is solid evidence to suggest that growth is also occurring in terms of deposits and the usage of decentralized applications (DApps) within the Solana ecosystem. Beyond derivatives, Solana's ecosystem is showing solid growth. Solana's total value locked (TVL), which measures the amount deposited in its smart contracts, has reversed its declining trend after six consecutive weeks.

SPL Token Influence

The bullish momentum in SOL token price can be attributed to a more favorable regulatory environment, increased demand for (Solana Program Library) SPL tokens and airdrops, and increased network activity, including DeFi and NFT markets. The rising activity on the Solana network, a massive influx of money into digital asset funds, and a recent tech upgrade have likely also contributed to the rally. Moreover, the recent tech upgrade, called "Sealevel," is a significant milestone for the Solana ecosystem. It allows the network to handle more transactions per second, making it more scalable and efficient.

The recent surge in SOL's price has also been attributed to the increasing number of SPL token airdrops and listings on exchanges, increased DeFi and NFT activity on the Solana network, and increasing trading volume. These airdrops are a way for projects to distribute their tokens to SOL holders, encouraging them to hold onto their SOL tokens. The listing of SOL on exchanges has also contributed to the price increase. As more exchanges list SOL, it becomes more accessible to investors, driving up demand and price.

In conclusion, the recent dramatic price increase of SOL can be attributed to several factors, including an increase in DApp usage, investor enthusiasm, and a few other key factors. The ongoing sale of SOL tokens by FTX's bankruptcy estate initially raised concerns among investors, but investor enthusiasm for SOL's price increase has since grown. The solid demand for leverage longs, growth in terms of deposits and the usage of decentralized applications (DApps) within the Solana ecosystem, and the recent tech upgrade have also contributed to the price increase. Finally, the rising SPL token airdrops and listings on exchanges, increased DeFi and NFT activity on the Solana network, and increasing trading volume have also played a significant role in the recent price increase of SOL. If you want to invest in SOL, you can buy it from Binance, EToro or ByBit.

Overall, there is a chance that Solana could reach $100 USD before New Year 2024. However, there are also a number of risks to Solana's price, and investors should carefully consider these risks before making any investment decisions. Remember, this is not financial advice and always DYOR.

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