Solana (SOL) Surges Past $170 as Helius CEO Challenges Layer-2 Fee Narratives

As Solana’s price propels upward, consolidating at approximately $170, investors are keenly watching for a potential breakout toward $184. The resurgence of interest in the Layer-1 blockchain comes as stable transaction fees and robust performance increase its appeal among crypto enthusiasts.

This past Sunday, May 17, marked a turning point for Solana (SOL) as it regained momentum above the $170 mark. Trading at $170.44, SOL exhibited a notable 27.5% increase over the last month, while Ethereum registered a more impressive upturn of 35% within the same timeframe, reflecting a broader bullish trend in the crypto market.

The insights shared by Helius CEO Mert Mumtaz offer a profound narrative about Solana’s competitive positioning against Layer-2 solutions. In a recent discussion on social media, Mert suggested that the architecture of Solana may afford it greater resilience compared to Layer-2 platforms like Arbitrum and Optimism—an assertion that has stirred considerable conversation among market participants.

Mert’s assertions were particularly centered around the ongoing debate regarding Layer-2 projects purportedly siphoning off fee revenues from Layer-1 blockchains. In a tweet dated May 13, seen by over 63,000 individuals, he emphasized that the revenue generated by blockchain networks is vital rather than ancillary. “Anyone who thinks chain revenue is irrelevant is coping. You can only increase volume if you innovate below the runtime level,” Mert stated, asserting the significance of stable fee structures.

Solana’s unique transactional framework is a key aspect of its appeal, differentiating it from EVM-based ecosystems. Unlike Ethereum’s rollups, which can lead to erratic gas prices due to congestion in specific applications, Solana employs parallel fee markets. This method allows for the isolation of transaction traffic between applications, preventing widespread fee spikes and ensuring a more user-friendly experience.

A follow-up post that Mert shared on May 16 showcased a comparative analysis of median fee volatility across prominent chains, including Ethereum and Solana. His findings highlighted Solana’s ability to maintain low fee levels despite managing transaction volumes that are 10 to 100 times greater than those of its competitors. Data from recent analyses further supports Mert’s position, positioning Solana as the leader in the field of fee stability, while Ethereum and its Layer-2 solutions exhibited considerable volatility.

Looking ahead, the question remains: Can Solana potentially eclipse Ethereum’s market capitalization in 2025? For Solana to achieve this milestone, its price would need to soar approximately 400%, targeting the ambitious price point of around $700 per token. Short-term price action indicates that for SOL to reclaim its 2024 highs, it must decisively break through the $176 threshold and close at or above $180 on a weekly basis.

If successful, aggressive upward movement could push SOL toward the $200 level, a psychological marker that may entice institutional investors to participate further. Yet, alongside this optimistic outlook, it’s crucial to acknowledge Ethereum’s recent gains following the successful Pectra Upgrade, which suggests that ETH will likely remain competitive in the current market landscape.

Currently, Solana’s recent trading activity has seen it operate within a narrow range, recently closing at $165.55, while fluctuations existed between $164.55 and $176.80. The ongoing constructive price action remains supported by the 50-day Simple Moving Average (SMA) at $147.11 and the 100-day SMA at $142.39, which now function as dynamic support levels.

Interestingly, this recent upswing in the price of Solana has pushed it beyond the 150-day SMA, which now presents itself as a near-term resistance level at $168.40. Technically, indicators such as the Relative Strength Index (RSI) demonstrate bullish momentum, resting at 56.67. Although it has dipped from its prior peak at 65.19, the orderly decline signals a phase of consolidation rather than a reversal.

Moreover, the Parabolic SAR remains positioned below the current price candles, further validating the ongoing bullish trend. Should bulls sustain control within the $165-$168 support bracket, a target of around $184 appears attainable in the near term. However, should there be a failure to uphold the 50-day SMA, downside risk toward $147 remains a concern that market participants should consider.

In summary, Solana’s ongoing developments and the insights shared from industry leaders like Mert Mumtaz hint at promising dynamics for the network. Both market sentiment and technical fundamentals point toward a potentially explosive phase for SOL if the current momentum is maintained. As always, stakeholders should approach these bullish signals with careful analysis and strive to understand the evolving landscape of blockchain technology.