Solana Price Rebounds Amid Project Advancement
24 Jan, 2024 ● Coin news
Solana's SOL token faced strong resistance at $102 on January 17, followed by a 23% drop to a five-week low of $78.60 on January 23.
The trend reversed as SOL rebounded by 10% within less than 24 hours, raising questions about the sustainability of this recovery and its potential to exceed $90.
This price movement is partly attributed to the introduction of "token extensions" on the Solana network, announced in the v.1.17 release of the Solana Labs validator client on January 19.
These features, such as confidential transfers, transfer hooks, and protocol-level fees, are tailored for enterprise applications and regulatory compliance.
Further optimism stems from Firedancer, a new third-party validator client under development by Jump Crypto, aimed at boosting Solana's transaction processing capabilities and supporting sharding.
A social media post by user R89 on the X network pointed out the improvements in Solana’s network stability following multiple issues in 2022.
In 2023, Solana sustained its performance while competitors, including Ethereum layer-2 solutions, experienced outages amid increased demand for blockchain space.
The successful launch of Solana SPL token airdrops on centralized exchanges in December 2023, highlighted by Jito’s JTO staking solution and the BONK memecoin, sparked a surge in demand for SOL tokens.
Social media searches reveal significant interest in Solana airdrops. While the actual impact of these airdrops is speculative, they have led to increased demand for SOL and heightened activity on the Solana network.
In January, Solana's primary decentralized application (DApp) metric demonstrated robustness, with the network’s total value locked (TVL) reaching 15.3 million SOL, nearing a three-month high despite a 28% decline in SOL's price over 30 days.
Solana has shown considerable growth in transaction activity and volumes, yet it still trails behind Ethereum and BNB Smart Chain in absolute terms.
Recent statistics show a 6% increase in transactions and a 12% rise in active DApp users on Solana over the past week. In contrast, Ethereum's network activity remained stable, while BNB Chain and Polygon saw decreases in volumes.
DApp highlights for Solana include Jupiter Exchange with 387,780 active addresses and Raydium with 190,650 users in a week. For comparison, PancakeSwap on the BNB Smart Chain had 263,010 active addresses, and Uniswap on Ethereum had 64,890 during the same period.
It remains uncertain if SOL's recent rise to $80 is solely due to the demand for airdrops and new token extensions, or if there are other underlying factors.
Nonetheless, the strong DApp activity on the Solana network suggests potential for further price growth beyond $90.
Sources:
https://cointelegraph.com/news/solana-price-rebounds-off-weekly-low-is-90-sol-possible
https://twitter.com/R89Capital/status/1749493713984761938
