Solana Price Breaches 3-month High in Rally
30 Oct, 2024 ● Coin news
Solana is trading above $180 once more after nearly three months of struggling to reclaim this level. Its month-long 16.3% rise to $183 parallels that of Bitcoin, which is now within $1,000 of its all-time high.
Onchain and derivatives metrics suggest that Solana's upward momentum may just be starting, with potential to reach $200 and beyond.
Data indicates a consistent increase in Solana’s total value locked (TVL), as the amount secured in its smart contracts has reached a two-year high.
On October 26, deposits on Solana hit 42.5 million SOL, the highest since September 2022.
This growth has been driven by key players such as Jupiter, which saw a 13% deposit increase over the past 30 days, Raydium with an 18% increase, and Sanctum with a 17% rise during the same period.
Solana has now overtaken BNB Chain as the second-largest network in terms of liquid TVL, though it still trails Ethereum.
The gap between Solana and Ethereum has been narrowing, with Binance recently launching a SOL liquid staking service that now ranks as the tenth largest in Solana’s ecosystem, indicating further growth potential.
Over the past 30 days, Ethereum’s TVL rose by 2%, while BNB Chain saw a 5% decrease.
However, it's worth noting that relying solely on deposit metrics can be misleading, as many decentralized applications (DApps)—including those for gaming, collectibles, Web3 infrastructure, social networks, and marketplaces—do not require substantial deposits.
Solana has recently surpassed Ethereum in decentralized exchange (DEX) volumes, holding this lead with a 19% increase over the past week.
In comparison, Ethereum’s activity rose by 6%, while BNB Chain declined by 3%. Across the broader Ethereum layer-2 ecosystem, volumes increased by 5%, leaving Solana as the top performer.
Within Solana's ecosystem, notable contributors include Raydium with a 20% increase, Lifinity with a 49% gain, and Phoenix with a 34% boost in activity over seven days.
A significant part of Solana's volume growth has been fueled by memecoins, raising questions about the long-term sustainability of this trend.
For example, Moo Deng surged by 178% in the past week, Goatseus Maximus by 71%, and Nosana by 70%.
Although it’s uncertain how long this memecoin rally will continue, history suggests that only a few memecoins, such as Shiba Inu, Pepe, and Dogwifhat, sustain value over time.
In addition to onchain metrics, the low level of leverage in SOL futures indicates that Solana's rally to $182 on December 29 is likely the beginning of a more extended bull cycle.
The current funding rate of 0.01% implies that buyers are paying modestly for leverage, translating to about 0.9% per month.
In high retail demand, this rate can exceed 2.1% per month, making the current rate neutral.
Combined with favorable onchain indicators, this data reflects strong SOL spot buying activity and suggests room for further gains, potentially toward $200 and above.
Sources:
https://cointelegraph.com/news/solana-price-hits-3-month-high-as-data-hints-at-sol-rally-above-200
