Solana rose 27% in July. What do analysts think of the subsequent market?

Author: Biraajmaan Tamuly, CoinTelegraph; Translated by: Tao Zhu, Golden Finance

Solana’s SOL token price is expected to achieve a 30% monthly return by the end of July and is expected to challenge its yearly high of around $210 in the coming weeks.

SOL/USD daily chart. Source: Trading View

Whilemost in the community attribute SOL’s success to Solana’s memecoin craze, the network’s strong liquidity staking ecosystem is becoming a powerful on-chain narrative.Let’s see how this trend is developing on the Solana network.

Liquidity Staking Tokens Lead Solana DeFi

Liquidity staking projects Jito and Marinade are the leading protocols on Solana, growing TVL by 40% and 30% respectively over the past month.

Solana Protocol Ranking. Source: DefiLlama

Liquidity staking is a process that combines the advantages of staking and liquidity. Holders can stake their tokens in a smart contract or staking pool and receive tokens representing their staked SOL.

This token is called Liquid Staking Token (LST) and can be used to earn yield on other protocols or for decentralized financial applications. For Jito and Marinade, these tokens are JitoSOL and mSOL, respectively.

The total amount of SOL deposited in liquidity staking derivatives more than doubled in 2024, according to Dune Analytics. The number of staked LSTs increased from 163,827 to 807,712, a 393% increase between June 1 and July 26.

Total staked LST chart. Source: Dune Analytics

Data analysis platform Token Terminal also shows that Solana’s daily and weekly active users have increased by 21% and 59% respectively. As highlighted above, the growth in active users is in sync with the growth of Jito and Marinade’s TVL. Therefore, it can be inferred that memecoins are not the only area currently bringing users to the Solana network.

Solana Daily Active Users (Weekly). Source: Token Terminal

Will SOL hit a new yearly high this week?

SOL’s price action shows bullish momentum, with the community expecting the price to retest the yearly high of $210. Previously, SOL had broken out of a bullish double bottom pattern, with the current overhead resistance at $202.

The overhead resistance is quite weak, and a retest of the yearly high is very likely. However, Solana is currently experiencing a correction, breaking below the $190 mark.

If Solana continues to follow the bullish trend, its immediate retest target will still be in the $200-210 range. Conversely, if it loses the immediate support area of ​​$180, the altcoin might retest its previous swing low of $165.

SOL/USD daily chart. Source TradingView

Meanwhile, options trader Trader Wick is leaning bullish, saying SOL/USD is once again leading the crypto market rally.

“Solana is doing great in the rally as usual,” he noted.

“Now that resistance has been broken, a breakout of an arrow setup usually starts a whole new trend.”