Solana Drops 1.419% Amid Solaxy Layer-2 Testnet Launch

Solana's latest price was $153.46, down 1.419% in the last 24 hours. The cryptocurrency has been making significant strides in the blockchain ecosystem, with several key developments and events shaping its trajectory. One of the most notable recent events is the launch of the Solaxy Layer-2 testnet on the Solana blockchain. This testnet marks a significant milestone in enhancing Solana's scalability and transaction efficiency. By leveraging rollup technology, Solaxy processes transactions off-chain and submits them to Solana’s mainnet for final verification. This approach enables faster and more cost-effective transactions, addressing longstanding network congestion issues and transaction failures that have impacted Solana's scalability. The testnet allows users to bridge SOL from Solana DevNet to Solaxy via a designated bridge, deploy smart contracts using Solana’s toolchain, and explore real-time on-chain activity using the Solaxy Explorer. The successful implementation of this Layer-2 testnet provides a clear solution to scaling issues while preserving Solana’s high throughput and low transaction costs, paving the way for a smoother user experience on Solana and establishing Solaxy as a potential leader in blockchain scalability.

In addition to the Solaxy testnet launch, Solana has also seen significant activity within its memecoin ecosystem. Pump.fun, a memecoin launchpad on Solana, is reportedly planning to launch its token by June. The platform, which debuted in January 2024, has been instrumental in sparking the ‘memecoin supercycle’ narrative and has contributed to Solana’s performance. Pump.fun has generated over $700 million in cumulative revenue since its debut, underscoring its success story. However, the platform has faced competition, leading it to diversify its offerings. It launched its own automated market maker (AMM), Pumpswap, and ended its partnership with Raydium. Some speculate that Pump.fun may even opt for a fully-fledged Layer-1 as part of its growth strategy. As one of the leading liquidity providers in the Solana ecosystem, Pump.fun’s growth or divergence from the chain could be a risk factor to SOL. Bitget’s chief analyst Ryan Lee noted that Pump.fun’s transition from relying on Raydium to its own PumpSwap has shifted trading volumes internally, potentially reducing liquidity available to other decentralized exchanges on Solana. Lee also flagged the platform’s transfer of 798,000 SOL to exchanges as a volatility source that could destabilize the SOL market. He called for balanced Pump.fun growth in a way that doesn’t affect Solana’s health. Similar reservations were shared by crypto influencer Ansem, who stated that Pump.fun raising $1B at $4B after the TRUMP memecoin launch is like the second plane hitting the towers. For perspective, the TRUMP memecoin’s debut in January drained liquidity across the market, triggering a local peak followed by an extended correction that lasted until April. Despite these concerns, the expected PUMP token debut has garnered attention from SOL traders, with some eyeing $110 support despite the overall bullish outlook.

Solana’s technical structure has also been a point of interest for analysts. The asset recently broke out of a consolidation phase and is now retesting previous resistance levels as new support. This technical setup mirrors a 2023 structure that led to a rapid fivefold rally. Market watchers believe this could set the stage for another substantial leg up in the current cycle. Analyst Cas Abbé noted that a nearly identical triangle formed between January and April 2024, with the breakout occurring in May. SOL is now performing an S/R flip around $130–$140, suggesting a strong support zone is forming, which could fuel a larger upward move. The S/R flip, where a previous resistance becomes support, often signals a continuation of an uptrend. In SOL’s case, the May breakout followed by a successful retest at $130–$140 confirms this pattern. Buyers appear to be stepping in, absorbing selling pressure and keeping price action above the breakout level. Such technical behavior is commonly seen before a major rally. In 2023, SOL followed this setup with a sharp move to $125 within months. While exact repeats are rare, market patterns often echo under similar conditions. However, unlike 2023, Solana now holds a much larger market cap, which limits the probability of another 5x surge. Abbé suggested a 2x to 3x move remains realistic, projecting a cycle peak between $400 and $500. The price zone of $300 to $450 aligns with the historical chart setup and current technical structure. As long as broader market conditions remain favorable, the technical roadmap points to continued upward momentum. This retracement is viewed as a typical retest phase after a breakout. Analysts maintain that holding the $130–$140 zone keeps the bullish case intact. If confirmed, the next major leg up may push SOL toward new cycle highs.