Key highlights:

• SOL plummeted more than other mahor cryptos during the FTX crash. It seems the market overcorrected, and now SOL is bouncing back to make up for lost ground.
• Solana's been scoring some big partnerships recently – case in point, they hooked up with Shopify so merchants can accept crypto payments quickly and cheaply using SOL.
• Solana's decentralized finance apps, or DeFi for short, have tripled users in just a few months.

Solana (SOL) has been on an impressive run over the past few weeks. The price of the SOL token has surged over 38% in the last 7 days alone. This has led many in the crypto community to wonder – what's causing this pump?

In this article, we'll explore 3 key reasons why Solana is seeing such strong price action right now.

Reason 1: Solana was oversold during the FTX crash

The first reason SOL is pumping right now is because it was heavily oversold during the FTX implosion. When FTX went bankrupt, the price of SOL crashed a whopping 79% in a matter of weeks. After the decline in the FTX crash, all investors had only one question in mind: Will Solana Recover?

This brutal sell-off was driven by forced liquidations of FTX/Alameda's SOL holdings. But here's the thing – Solana didn't have any direct involvement in FTX's shady dealings, at least as far as what’s publicly known. It could be argued that the sell-off was irrational and pushed SOL price far below its true value.

Now that the crypto market sentiment is improving, SOL is bouncing back more aggressively than other top cryptos. It's making up for lost ground and correcting the oversold conditions.

Reason 2: A wave of positive developments in the SOL ecosystem

There have also been some legitimately positive developments for Solana in recent weeks that are fueling the rally.

In late August, Solana launched an integration with Shopify that allows merchants to accept crypto payments settled in USDC on the Solana blockchain. Over 1 million Shopify stores now have access to fast, low-cost Solana payments.

1/ ?️Shopify ?Solana Pay

Today, Solana Pay integrates with @Shopify, empowering the millions of entrepreneurs and merchants on Shopify to accept fast, web3 native payments with no transaction fees through the end of 2023. https://t.co/q63KeBllXB

Learn more ? pic.twitter.com/QEb1LzqS51

— Solana (@solana) August 23, 2023

Shortly after, Visa announced it was using USDC on Solana for its new cross-border settlement network. This could dramatically improve the efficiency of Visa's global payment operations.

These are just two examples of real-world Solana adoption happening right now. The more its blockchain technology is utilized, the higher demand grows for the SOL token.

Reason 3: Surging DeFi activity

Beyond price and partnership news, we're also seeing a surge in decentralized finance (DeFi) activity on Solana that is boosting confidence in the ecosystem.

According to DefiLlama, the total value locked in Solana DeFi has tripled since the start of 2023, surging from $214 million to over $654 million currently.

Solana TVL. Image source: DeFiLlama

As Ethereum gas fees remain high, developers are turning to SOL's high-speed, low-cost blockchain for their DeFi applications. This increase in platform usage increases the utility and value of the SOL token.

The growth of Solana's DeFi ecosystem shows that developers still see a bright future despite the FTX fiasco.

SOL still has room to run

Given these developments, analysts generally agree that Solana still has room to run. The CoinCodex algorithm predicts SOL will rise another 65% by year's end to hit $47.

Of course, a broader crypto rally would provide a significant tailwind. But even in neutral markets, Solana appears poised to continue outperforming. Its blockchain activity is expanding and the price has corrected from irrational lows.

Many investors state that they invest in Solana for the long term because they trust its technology and team. You can also find Solana price prediction for 2040-2050 in our article.