Solana (SOL) has been making waves in the cryptocurrency world, drawing attention for its rapid resurgence after a month-long downtrend. With its price climbing back into double digits, Solana has shown signs of life and is poised for a potential breakout. However, reaching a target of $220 in 2025 won’t be easy. While the foundation for growth is undoubtedly forming, a perfect storm of internal and external factors must align for SOL to break through its current price barriers.

Solana’s Strong Start to 2025

The beginning of 2025 has been promising for Solana. After a period of stagnation from its all-time high (ATH) of $264, SOL has made a notable comeback. As of now, the cryptocurrency is making steady gains and approaching a crucial milestone — a potential breakthrough past the $220 mark. At present, Solana’s Total Value Locked (TVL) is nearing $12 billion, which signals that liquidity is returning to the network. In fact, the recent $1 billion in stablecoin liquidity absorbed by Solana’s ecosystem shows there is clear interest in the platform’s offerings.

However, for Solana to reach its ATH again, SOL will need to push about 20% higher. While this doesn’t seem like an impossible task, achieving this target will require a confluence of favorable conditions both inside and outside the crypto ecosystem.

Internal Momentum: Solana’s Tech & Network Usage

Solana’s cutting-edge technology is driving its recent performance. The blockchain’s network usage is on the rise, evidenced by a 13% increase in network fees, which totaled $16,698.88 in just 24 hours. This uptick in transaction volume underscores the growing popularity of Solana’s ecosystem, particularly among decentralized finance (DeFi) users and developers building on the platform.

In addition to network fees, another key growth driver is Pumpfun, Solana’s token creation initiative. Pumpfun has gained considerable traction, with daily addresses approaching 250,000. This suggests that liquidity is moving through Solana’s network for a variety of use cases beyond just DeFi, adding to the overall demand for the platform’s capabilities.

Another encouraging sign is Solana’s staking returns. The return on staking has risen by 5%, now sitting at 8.5%. This is a clear incentive for investors to lock up their SOL tokens, further boosting the network’s liquidity. As more SOL tokens are staked, the available supply on the market decreases, which can contribute to upward price pressure.

The technical indicators for SOL also remain positive. The moving average convergence divergence (MACD) is showing a bullish crossover, while the relative strength index (RSI) is not yet in overbought territory. These indicators suggest that SOL’s price could continue to rise in the short term if the momentum persists.

External Factors That Could Impact SOL’s Price

While Solana’s internal metrics are strong, the cryptocurrency market is highly susceptible to external factors, and these could pose challenges for SOL’s price. In particular, the performance of Bitcoin (BTC) is likely to play a significant role in Solana’s ability to break past the $220 barrier.

Recently, as Bitcoin approached the $100,000 mark, the SOL/BTC trading pair experienced a dip, signaling that Solana’s relative strength against Bitcoin is weakening. This trend raises questions about whether Solana’s recent surge was merely a short-term spike driven by heightened network activity, rather than a sustained bullish trend.

The broader market trends, including liquidity from Bitcoin and other top assets, will likely impact Solana’s price action. Should Bitcoin experience volatility or market corrections in the near future, SOL could face additional downward pressure, making it more difficult to maintain upward momentum.

Rising Open Interest and Growing Interest in SOL

Despite potential headwinds, Solana has shown impressive gains in key metrics such as Open Interest (OI). The OI for SOL surged by 22.38% in just one week, climbing from $4.78 billion to $5.85 billion. This suggests that traders are increasingly confident in SOL’s potential for continued growth, which could drive further price increases.

The increase in OI is also a sign of growing market liquidity and increased participation in the SOL market. With more traders opening positions, the potential for volatility and price movements increases, which could propel SOL closer to its $220 target if bullish momentum holds.

The Road to $220: What Needs to Align

For Solana to break past $220 and approach its ATH, several factors must align perfectly. First, Solana’s internal momentum must continue. The network’s growing TVL, increasing staking rewards, and rising transaction volume all point to a strong foundation for future growth. If this momentum continues through Q1 2025, Solana could see more liquidity flowing into its ecosystem, pushing SOL towards its target.

However, external factors — such as Bitcoin’s performance, macroeconomic trends, and overall market sentiment — will play a critical role. Solana’s price could face significant challenges if Bitcoin faces a correction or if external market forces lead to liquidity constraints.

Conclusion: Can Solana Break $220?

Solana is undoubtedly on a strong path toward potential growth in 2025. The network’s growing TVL, rising staking returns, and increasing network activity all signal a healthy ecosystem that could drive SOL’s price upwards. However, for Solana to hit $220, it will need a perfect combination of bullish internal and external factors. While the potential is there, Solana’s ability to sustain its momentum and break through its price ceiling will depend on how well it can weather external market pressures.

If Solana can continue to thrive in the face of these challenges, there’s a real chance that SOL could make a strong push towards $220 in 2025.