Solana Surges 9% Past $110 to Hit Highest Level Since January
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On August 28, Solana surged 9% to approach $110, hitting a six-month high amid stagnant Bitcoin and Ethereum performance. This rally was primarily driven by a pending double deflation proposal, which has achieved quorum and aims to reduce SOL's inflation rate by half, potentially cutting supply by 19 million tokens over six years to enhance long-term scarcity. While short-term profit-taking near $120 may trigger volatility, the broader bullish trend remains intact as long as prices hold above the $100 psychological support level.
TradingKey - Solana Price Surges 9% to Approach $110, Hitting a Six-Month High.
On August 28, Solana (SOL) surged 9% in a single day, powerfully breaking through the $110 mark and hitting a new high since January this year, reflecting that market capital is revaluing Layer 1 public chains with practical use cases and high throughput.
Amid stagnant gains in Bitcoin (BTC) and Ethereum (ETH), Solana's sudden strength was mainly driven by a deflation proposal. According to monitoring by SolanaFloor, Solana's double deflation proposal has reached a quorum, with voting participation exceeding 33% and yes votes reaching 25%, making its passage highly likely.
If the deflation proposal passes, it means the growth of SOL's token supply will slow down, reducing the inflation rate to roughly half of its original level and potentially reducing supply by 19 million SOL tokens over the next six years, which will significantly improve medium-to-long-term supply-demand dynamics and scarcity.
After a sharp short-term surge of 9% in SOL, some quantitative funds and leveraged contracts positioned at lower levels early on may take profits near $120, triggering intense short-term market shakeouts. However, the previous resistance level has now turned into strong support, and as long as the daily close does not fall below the $100 psychological barrier, the overall bullish trend remains intact.
Solana price chart, Source: TradingView
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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