The SOL token of Solana reached an all-time high of 264.50 USD on November 22, amid Bitcoin's price surge to nearly 100 thousand USD and excitement around meme tokens. At the same time, many Solana-based tokens also recorded price increases of over 100% in the past month. Could SOL reach 350 USD?
Weekly DEX volume of Solana, in billion USD. Source: DefiLlama
Solana maintained daily DEX trading activity above 6 billion USD over the past week, accounting for 45% of the total market share. This increase is unprecedented, especially when compared to other networks, particularly given Solana's transaction fees are very low compared to Ethereum (ETH), BNB Chain (BNB), and Polygon.
Some market analysts suggest that the price of SOL could continue to rise, as its current market capitalization of 121 billion USD is still 70% lower than Ethereum. On-chain and derivative analysis of Solana indicates potential. However, a broader consideration is needed in the context of overall competition.
The frenzy around meme tokens drives record DApp activity on Solana
The Solana network has a total value locked (TVL) of 9.2 billion USD, outperforming BNB Chain by 73%, which holds 5.3 billion USD in assets. At the end of July, both networks had equivalent TVLs of 4.5 billion USD, but the gap has widened significantly. For comparison, the top layer two scaling solutions of Ethereum such as Base, Arbitrum, Polygon, Optimism, Blast, and Linea also have a total TVL of 9.2 billion USD.
Solana has achieved a TVL equivalent to six of Ethereum's top scaling solutions by creating a lower barrier for users. A large part of Solana's appeal comes from the easy integration of wallets like Phantom and Solflare with its major decentralized applications (DApps), resulting in unprecedented weekly trading volumes of 41.1 billion USD across Solana's decentralized exchanges (DEXs).
Weekly DEX volume, in billion USD. Source: DefiLlama
Except for Solana, all other top 10 blockchains have recorded a significant decline in DEX trading volume, which is quite surprising. DappRadar reports that 29.3 million unique active addresses interacted with DApps on Solana in the past 7 days. In comparison, NEAR recorded 9.6 million, opBNB had 7.8 million, and Base had 4.6 million.
The emergence of quick profits through meme token trading has attracted the attention of prominent Bitcoin supporters, including internet figure ‘TylerDurden’. He publicly informed his followers that “Pumpenomics” is the main factor driving the price potential of Solana's tokens, while warning them about other influencers who may use dubious methods to lure their audiences.
Leverage is another risk factor for SOL's price, as excessive optimism among futures traders could lead to mass liquidations. Even a standard 5% daily drop could trigger the liquidation of a position with 20x leverage.
The funding rate for SOL perpetual futures every 8 hours. Source: Laevitas.ch
The funding rate for SOL futures contracts reached about 4.2% per month on November 22, which is not overly concerning. Currently, this rate has stabilized at 2.4% monthly for long positions, just slightly above neutral.
Although on-chain data from the Solana network may be skewed by low transaction fees, strong activity in DApp deposits and the resilience of SOL's futures market suggest a strong bullish trend. This could be an indicator of upcoming price surges surpassing the current all-time high of 264.50 USD.
Follow me @TinTucBitcoin #tintucbitcoin #Write2Win #btc #binance #binance
