Solana price goes up to $193 but is SOL local high?

Solana's native token SOL (SOL) posted an impressive 16 percent gain between July 25 and July 29, hitting a four-month high of $193.92. However, the $190 resistance was stronger than expected, triggering an 8% correction to the current $179 level.

Despite this short-term decline, SOL prices gained 23.5% in July, although some traders fear that the downward trend has just begun.

Are memecoin rallies a sustainable way for the Solana network to grow?

To determine whether SOL's price can be corrected further, it's important to analyze whether recent performance has been justified—whether it's based on fundamentals, mass, or simply inflated metrics. For example, investors have high hopes for the approval of SOL's Exchange-Traded Fund (ETF) after Ether (ETH) instruments were allowed to trade in the United States on July 22. The US Securities and Exchange Commission (SEC) has issued a deadline. SOL ETF decision in March 2025.

Speaking at the Bitcoin conference on July 25 in Nashville, BlackRock's head of digital assets said that “today there is very little interest” among their client base beyond Bitcoin and Ether. This opinion is not unanimous, as asset manager Franklin Templeton gives a very positive outlook for the SOL ETF, which has successfully overcome “mainstream adoption” and “technological growing pains”. While it may be premature to bet on the outcome of the SEC's decision, traders' speculation partially explains SOL's recent gains.

Memecoins, especially those using leveraged-liquidity and trading platforms like Pump.fun, have also driven Solana's network size and revenue gains. The platform promises an easy and fast way to launch brands using a “fair-launch” method without pre-sales or group allocation, automated marketing and incentive burn-in methods.

Pump.fun payouts totaled $25.8 million over the past 30 days, according to Defillama, surpassing the $24.4 million paid to miners by the Bitcoin protocol over the same period. In addition, unique addresses connected to Pamp.fun reached 219,070 last week, with BNB Chain PancakeSwap at 118,750 and Ethereum Uniswap at 132,010 users at the same time, according to Dapradar data.

Investors question Solana's heavy reliance on memecoins, including Dogwiffhat (WIFF), Bonk (BONK), Book Meme (BOME) and Cat in Dog World (MEW). However, this criticism is directed at Solanan's SPL tokens such as Jupiter (JUP), Lido Dao (LDO), Helium (HNT) and Radium (RAY) which require significant additional technology to support the high throughput of the network. Base layer.

Solana stagnant TVL and excessive force in the hands of the verifiers creates danger

Some other concerns about Solana have investors rethinking if the 190 SOL price is right. After reaching 32.1 million SOL on July 5, the total value of the network has stagnated at 30.5 million SOL for the past two weeks. This is the highest level since October 2022, according to Defillama data. Competitors like Ethereum face the same problem, with the current 18.0 million ETH TVL flat as of July 14th. Additionally, BNB Chain's TVL stood at 8.5 million BNB (BNB) during the same period.

Finally, there is a valid criticism of the maximum extractable value (MEV) problem affecting the Solana network. Validators can profit by including, reordering, or excluding transactions when producing a new block. Although competing chains face similar problems, this problem is exacerbated for Solana because it lacks a “built-in memory pool,” forcing players to “use non-protocol infrastructure,” according to a Flip Research article on X.

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A Flip Research article says Solana's decentralized application benchmarks are “grossly inflated” because “the tokens being traded are extremely volatile, low-liquidity memecoins,” creating a “juicy attack surface for pricing MEVs.” The article concludes that “most organic users are quickly losing money to bad actors,” which seems unsustainable.

While it may be premature to call SOL “overvalued from a fundamental perspective,” the research paper says, traders who are currently taking profits may reconsider their positions due to excessive uncertainty over the network's growth potential.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.