Solana’s Surge: What’s Behind SOL’s Price Rally?

Solana (SOL) experienced a network outage on February 6, causing concerns among investors about a potential sell-off. SOL traders appear to be unaffected by the incident as the price has recovered, rising by 1.04% in the last 24 hours. It remains to be seen whether SOL’s resilience is due to the overall market conditions or other factors driving the altcoin’s price upwards.

The total crypto market capitalization reached $1.6 trillion on February 7, with most top-cap cryptocurrencies showing positive movement. Bitcoin remained steady above $43,000, while Ether saw a 1.25% increase, trading at $2,371. Several factors could contribute to a potentially bullish market, such as the approaching Bitcoin halving event, optimism about spot Ethereum ETF approval in May, and the Dencun upgrade on the Ethereum network.

Investment in Solana-based products has been on the rise, surpassing that of competitors like Ether and Avalanche. According to CoinShares, SOL investment products received $13.4 million in inflows, while Ethereum and Avalanche saw outflows of $6.4 million and $1.3 million, respectively, in the past week. The data also revealed that a total of $707.8 million was invested in crypto products globally, bringing the total assets under management to $53 billion.

In terms of investor activity, Solana’s Total Value Locked (TVL) metric increased to $1.65 billion on February 7. Solana’s decentralized exchange volume remained high, ranking second behind Ethereum. Over the past week, DEX volume on Solana was $6.25 million, compared to Ethereum’s $7.582 billion. Solana’s low transaction costs have attracted new users, particularly those seeking new airdrops. Transaction fees on Solana remain consistently low, ranging from $0.0001 to $0.0003, which is significantly lower than fees on Ethereum.