Solana price has done well in the past few weeks as investors buy the dip, and the market capitalization of all coins continue rising. The SOL token has jumped to $150, up by over 60% from its lowest level this year, and is hovering at the highest point since March 3. This article explains why the SOL price may surge by at least 46% in May.
Solana price technical analysis
The daily chart reveals that the SOL price bottomed at $94.8 in April as most of its meme coins plunged. The situation was so dire such that the market cap of all these tokens bottomed at $6 billion, down from the all-time high of over $26 billion.
This chart shows that the coin has moved above the 23.6% Fibonacci Retracement level at $142.15. At the same time, it has jumped above the 50-day Exponential Moving Average (EMA), a sign that the coin is gaining momentum.
Most importantly, Solana price has formed a bullish flag chart pattern. This pattern has a tall vertical line and a flag-like pattern. In most cases, this pattern usually leads to a strong bullish breakout over time.
Therefore, the coin will likely continue rising this month as bulls target the initial target at the 38.2% Fibonacci Retracement level at $171.40. A move above that level will signal more gains, potentially to the 61.8% retracement level at $220, which is almost 50% above the current level.
The bullish Solana price forecast will become invalid if it drops below the key support at $125.
Top catalysts for SOL price in May
There are a few catalysts for Solana price in May this year. First, there are signs that investors are moving to the coin for the long term and to take advantage of the rising staking reward.
Over 5 million new SOL coins worth $755 million were staked in April. This makes it one of the top altcoins in terms of staking. This growth propelled the staking market capitalization to over $58.76 billion. Solana now has a staking ratio of 65%, a sign that many investors want to hold it for the long term.
This demand is rising as the average reward rate among various validators continues to rise. It is now yielding 8.81%, higher than other altcoins like Ethereum and Sui. The reward rate has risen from a low of 8% last month.
Solana price will also jump as the momentum surrounding a spot SOL ETF jump. Several companies like VanEck, 21Shares, Canary Capital. Grayscale, Franklin Templeton, and Fidelity have all applied for a spot Solana ETF.
A Solana price surge would accelerate if these ETFs come with staking feature. This would mean that, instead of just holding the tokens, the custodian would be free to stake the tokens and generate a return.
Another potential catalyst could be the continued growth of its ecosystem. Recent data indicate that the network is performing well, as its Decentralized Exchanges (DEX) have handled over $70 billion in the last 30 days, surpassing Ethereum’s $56 billion.
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