SOL, the native token of the Solana network, has struggled to surpass the $145 mark since July 3.
This subdued performance reflects waning investor interest in cryptocurrencies, which led to a 5% drop in the sector’s total market capitalization over nine days.
During this period, SOL lagged behind competitors, experiencing a 7.8% decline, whereas BNB and Ether saw smaller decreases of 6.5%.
Concerns linger among traders about SOL’s bearish trend persisting despite potential recoveries in the broader crypto market.
Yet, promising signs from Solana’s onchain metrics and SOL derivatives suggest a possible turnaround, hinting at a bullish breakout above $160, a level not seen in over five weeks.
The underperformance of certain Solana SPL tokens has also contributed to decreased demand for SOL.
Significant losses were observed among ecosystem tokens, including a 24% drop in Dogwifhat (WIF), an 18% decline in Helium (HNT), and an 18% correction in Jito (JTO) between July 3 and July 12.
Despite recent challenges, SOL maintains its position as the fourth largest cryptocurrency by market capitalization, excluding stablecoins, with a valuation of $65 billion.
In comparison, Toncoin (TON) holds $18.4 billion, Tron at $12 billion, and Avalanche at $10.1 billion.
A noteworthy development occurred on July 5 when Solana’s total value locked (TVL) matched that of the BNB Chain for the first time.
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This parity has continued since, marking a significant shift in capital deployment towards the Solana network, according to DefiLlama data.
Solana’s leading protocols include liquid staking Jito with $1.6 billion in deposits, followed closely by Marinade and Kamino, both nearing $1.1 billion in TVL.
Solana’s network activity has shown resilience amidst broader market declines.
While Ethereum, BNB Chain, and Polygon experienced reductions in active users and transaction volumes, Solana saw a 19% increase in users and a 12% rise in DApps volumes over the past seven days.
Raydium, Solana’s decentralized exchange, recorded a notable 39% surge in active addresses, contrasting with Move Stake on BNB Chain, which saw 198,570 active addresses over the same period.
Examining SOL’s futures markets reveals a nuanced picture, with perpetual contracts showing a near-zero funding rate recently, indicating balanced demand between buyers and sellers.
This stability suggests that despite current uncertainties, SOL’s market fundamentals remain steady, potentially laying the groundwork for renewed investor confidence and a resurgence towards the $160 threshold.
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