Solana Rallies 40% Off The Lows: Is This Momentum Sustainable Or Just Another Bull Trap?

Since April 7, when Solana printed a low of $95.26 per SOL, it has risen 40% to $132.77 per SOL as of April 12.

Solana has seen similar moves in the past, only to fade afterward. A recent example is when President Donald Trump announced the idea of a Crypto Reserve, with Solana being a part of it. Following that announcement, Solana rallied 40% before continuing to decline.

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Solana's market structure has also remained bearish, even after the recent rally. But could this be the higher timeframe shift the bulls have been waiting for?

Let's take a look.

Solana's Fundamentals

It's always important to understand the asset or market you're looking to trade or invest in. When it comes to Solana, it is a highly volatile market—an extreme beta-driven asset at the end of the day.

This means Solana tends to move in line with the overall market. If Bitcoin trades higher, Solana will likely see even larger gains — but it could also experience steeper losses if Bitcoin moves lower.

Solana's fundamentals are rooted in its high-performance blockchain infrastructure, designed for speed and scalability. With its unique Proof-of-History consensus combined with Proof-of-Stake, Solana can handle thousands of transactions per second with low fees, making it attractive for developers building DeFi platforms, NFT marketplaces, and real-time applications. Its ecosystem has grown rapidly, supported by a strong developer community and growing institutional interest.

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Memecoins have played a big role in the push that Solana has seen over the last few months as it made its way back toward all-time highs. The reason for this is that they've driven a surge in on-chain activity, attracting both retail and speculative capital to the Solana ecosystem. With low transaction fees and fast execution times, Solana became the preferred network for launching and trading memecoins—leading to increased demand for SOL as users needed it to participate. This wave of hype and user engagement helped fuel momentum, reinforcing Solana's position as a top-performing blockchain during this cycle.

However, as the excitement in the memecoin space has started to die down, the increased activity has also subsided. This has led to a decline in DEX volumes, which in turn has contributed to a downward move in Solana’s price. As speculation and trading volume in memecoins cool off, the broader market sentiment has shifted, pulling back some of the gains Solana experienced during the peak of the memecoin frenzy.

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What to Watch

Solana has great potential to be a widely used blockchain, but the current issue is that the driver of the volume hasn't come from sustainable value—it's been largely fueled by memecoins. This doesn't mean Solana can't trade higher. In fact, Solana has seen a nice bounce from the lows. However, until the overall fundamentals shift, where on-chain volume is sustainable and not driven by a negative-sum game like memecoins, I wouldn't expect Solana to make a move toward all-time highs in the near term.

This volatility is great for traders, but as an investor, you would want to see a positive narrative shift for Solana, rather than it being viewed as a casino.

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