As a seasoned analyst with over two decades of experience in the tech and finance industries, I’ve seen my fair share of market fluctuations. The current surge in Solana (SOL) prices, trading above $180 again, is certainly intriguing, especially given its struggle to recapture this level for nearly 3 months.
After wrestling with reaching the $180 mark for almost three months, Solana’s (SOL) trades have surged above it once more. This latest ascent to $183, representing a 16.3% increase over the past month, coincides with Bitcoin (BTC) approaching its record high by $1,000. However, is there data specific to Solana that suggests further upward momentum?
It appears that data from on-chain and derivative measurements suggests that Solana’s bullish trend might still be in its early stages, potentially leading to increased values approaching $200 or higher. Notably, the total value locked (TVL) within the Solana network has been consistently increasing, reaching a two-year peak in terms of the amount secured by its smart contracts.
On October 26th, the Solana network recorded its highest deposit total since September 2022, amounting to approximately 42.5 million SOL. Major contributors to this rise include Jupiter, which experienced a 13% surge in deposits over the past month, Raydium with an 18% increase, and Sanctum, seeing a 17% influx during the same timeframe.
Solana ranks second in decentralized applications
Currently, Solana has moved ahead of BNB Chain to claim the second-largest spot in terms of Total Value Locked (TVL), even though it continues to lag behind Ethereum. Over the past few years, the disparity between the two networks has gradually lessened. A notable instance highlighting Solana’s progress is the debut of Binance’s SOL liquid staking service, which presently ranks tenth in the Solana ecosystem, indicating a strong possibility for further expansion.
Over the last month, Ethereum’s Total Value Locked (TVL) grew by 2%, contrastingly, BNB Chain saw a drop of 5%. It’s worth mentioning that focusing solely on deposit amounts might be deceptive, as numerous decentralized applications (DApps), such as games, digital collectibles, Web3 infrastructure, social networks, and marketplaces, do not necessitate substantial deposit bases.
Over the last week, Solana has taken the lead in decentralized exchange (DEX) trading volumes, with a notable 19% boost. Meanwhile, Ethereum saw an increase of 6%, but BNB Chain experienced a slight dip of 3%. Interestingly, while Ethereum’s overall activity within its layer-2 ecosystem grew by 5%, Solana still holds the top spot.
As a researcher delving into the vibrant Solana ecosystem, I’ve observed notable contributors that have significantly impacted its dynamics. For instance, Raydium has witnessed a remarkable 20% surge in its activities. Similarly, Lifinity has experienced a staggering 49% increase in trading volumes within the same period. In just seven days, Phoenix managed to add an impressive 34% to its activity levels.
For instance, Moo Deng (MOODENG) surged by 178% over the past week, Goatseus Maximus (GOAT) rose by 71%, and Nosana (NOS) jumped 70%. While it’s impossible to predict how long the memecoin rally will last, history shows that only a few can maintain value over the long term. Notable exceptions include Shiba Inu (SHIB), Pepe (PEPE), and Dogwifhat (WIF).
Low leverage use leaves room for price growth
Beyond just looking at on-chain indicators, the moderation in the use of high levels of borrowing for SOL futures indicates that the price surge to $182 on December 29 may simply represent the early stage of an extended bullish trend.
At a funding rate of 0.01%, those holding long positions (buyers) are essentially paying a fee to borrow more money, which translates to approximately 0.9% per month. In instances where retail demand is high, this rate can surge up to 2.1% monthly; presently, it’s seen as neither bullish nor bearish, or neutral. Considering the favorable on-chain statistics, this data suggests robust SOL spot buying activity, potentially setting the stage for price increases toward $200 and beyond.
In this write-up, you’ll find broad, informative content that shouldn’t be interpreted as legal or financial guidance. It’s essential to remember that the ideas shared by the writer may not align with those held by CryptoMoon.
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2024-10-29 22:46