Solana's SOL Token Surges 86% Amid Altcoin Market Rally

Solana's native token, SOL, has experienced a significant surge, increasing by 86% between April 7 and May 26. This rally followed the broader altcoin market trend, which saw Bitcoin reach new all-time highs above $111,000. Despite SOL struggling to break above $180, onchain and technical data suggest further gains are likely. The total value locked (TVL) on the Solana blockchain has increased by over 54% to $9.44 billion on May 26 from multimonth lows of $6.12 billion reached on April 7. This increase was led by Raydium, with a 52% increase in a month, while other major decentralized applications such as Jupiter DEX, Jito liquid staking, and Kamino Lending gained 12%, 25%, and 11%, respectively.

Solana's TVL growth has positioned it as the second-largest blockchain by TVL, trailing only Ethereum. This growth surpasses the Ethereum layer-2 ecosystem, which includes Base, Arbitrum, and Optimism, as well as BNB Chain. The rise in Solana’s TVL mirrors an increase in memecoin market capitalization, with Solana-based memecoins posting double-digit daily losses in the weekly and monthly timeframes. Most of these tokens are 50% to 80% from local lows, resulting in Solana's collective memecoin market cap increasing to $13.4 billion on May 26 from $8.1 billion on April 8, a 65% climb in less than two months. This rise in memecoin activity on Solana indicates high network activity and rising usage, positively impacting demand and SOL price.

SOL’s price action has been painting a V-shaped pattern on the weekly chart since January. A V-shaped recovery is a bullish pattern formed when an asset experiences a sharp price increase after a steep decline. It is completed when the price moves up to the resistance at the top of the V formation, also known as the neckline. SOL appears to be on a similar trajectory and now trades below a supply-demand zone between $180 and $200. A breakout here will increase the chances of the price rising to the neckline at $252 to complete the V-shaped pattern. Beyond that, the next target would be the all-time high above $295, representing a 66% increase from the current price. The relative strength index has increased to 53 at the time of writing from 36 at the end of March, suggesting that bullish momentum is picking up. According to the analyst's forecast, SOL price could rise by 45% with a decisive bullish breakout above $180 in the coming days.