On January 20, 2025, Solana [SOL] briefly surpassed Tether [USDT] to become the fourth-largest cryptocurrency by market capitalization, driven by a surge in SOL’s price to $295. Although it has since dropped back to fifth place with a market cap of $126 billion, analysts are questioning whether Solana can challenge Ethereum [ETH] next.
- Solana briefly surpassed Tether in rankings.
- SOL price peaked at $295 recently.
- OFFICIAL TRUMP memecoin boosted Solana's activity.
- Daily transactions surged to 850,000.
- Ethereum maintains a significant market lead.
- Sustainability depends on organic adoption growth.
Solana’s recent price surge can be attributed to heightened network activity following the launch of the OFFICIAL TRUMP memecoin. This event significantly increased trading volumes and investor interest, with daily transactions peaking at 850,000. The trading volume also saw a dramatic rise from $9 billion to $20 billion within just 48 hours. Additionally, Solana’s Total Value Locked (TVL) reached an unprecedented $11.3 billion, indicating strong liquidity and engagement on the platform.
Technical indicators suggest that Solana is experiencing strong momentum. The 50-day moving average stands at $210.10, well above the 200-day moving average of $175.90. The Relative Strength Index (RSI) reading of 69.44 indicates strong momentum, with room for further price increases. Trading volume during this rally reached 1.73 million SOL, reflecting significant market interest.
In contrast, Ethereum’s market position remains robust, trading at $3,393.63 with a market capitalization exceeding $411.3 billion. To challenge Ethereum, Solana would need to reach a price of approximately $850, assuming current supply levels remain constant. The gap between Solana and Ethereum is around $285 billion, suggesting that while Solana has potential for growth, it faces a substantial challenge to flip Ethereum.
Despite its recent retreat to fifth place, Solana’s trajectory presents interesting possibilities. The sustainability of its growth will depend on maintaining network activity beyond speculative trading associated with memecoins. For Solana to solidify its position, it must focus on building a robust ecosystem and attracting long-term development activity.
In summary, while Solana’s recent performance showcases its potential to challenge established cryptocurrencies, significant hurdles remain. The network’s ability to foster organic growth and maintain user engagement will be crucial for its future positioning in the competitive crypto landscape.
