Oct 30, 2024
6thTrade
Solana (SOLUSD) has surged back above $180, a level it had struggled to hold for nearly three months. The recent 16.3% rally to $183 aligns with Bitcoin’s own upward momentum as it edges closer to its all-time high. But beyond Bitcoin’s boost, Solana-specific data suggests there’s plenty of fuel left for an extended bull run, with signs pointing to a potential rally toward $200 and beyond.
Onchain Growth and Derivatives Point to a Promising Run
Both onchain and derivatives data paint a positive outlook for Solana’s future. The total value locked (TVL) in Solana’s smart contracts hit a two-year peak, with deposits now climbing steadily. As of October 26, Solana’s network held 42.5 million SOL in deposits—the highest level since September 2022. This boost is partly driven by popular decentralized finance (DeFi) platforms on Solana. Key players include Jupiter, which recorded a 13% deposit increase over the past month, Raydium with an 18% gain, and Sanctum, up 17%.
Solana’s Ascent in Decentralized Applications
In terms of liquid TVL, Solana has recently moved ahead of BNB Chain to rank as the second-largest network, second only to Ethereum. Though Solana still trails Ethereum, the gap has been narrowing. A testament to this growth is Binance’s recent SOL liquid staking service, now ranked tenth in the Solana ecosystem. The increased attention around Solana's ecosystem could signal more expansive growth for the network in the near future.
Ethereum’s TVL, by comparison, rose just 2% over the last month, while BNB Chain fell by 5%. However, solely focusing on deposits can give an incomplete picture. Many decentralized applications (DApps), especially those related to games, Web3 infrastructure, social networks, and marketplaces, do not require substantial deposit volumes.
Solana Leads in DEX Volumes
Solana has made remarkable strides in the decentralized exchange (DEX) sector, surpassing Ethereum in DEX volume growth and maintaining its lead with a 19% increase over the past week. By contrast, Ethereum’s DEX activity rose by 6%, while BNB Chain saw a 3% decrease. Even as Ethereum’s layer-2 ecosystem volumes rose by 5% over the same period, Solana continues to capture more market share.
Within the Solana ecosystem, notable contributors include Raydium, which saw a 20% volume increase, Lifinity, with a remarkable 49% gain, and Phoenix, which rose 34% in just seven days. Much of this activity is due to a surge in memecoin trading, with tokens like Moo Deng (MOODENG) up 178%, Goatseus Maximus (GOAT) up 71%, and Nosana (NOS) up 70% in the last week. While the memecoin trend is notoriously hard to sustain, some tokens, such as Shiba Inu (SHIB) and Pepe (PEPE), have managed to hold value over time, suggesting a few might emerge as long-term winners.
Leverage Levels Indicate Room for Price Growth
A further optimistic sign is the relatively low leverage currently being used in SOL futures. With a funding rate of 0.01%, indicating a neutral level, there’s room for bullish buyers to ramp up positions without high costs. When funding rates soar above 2.1%, it usually reflects intense demand from retail buyers, but the current modest level suggests SOL’s rally to $183 might be just the beginning of a broader cycle.
With both onchain metrics and neutral funding rates aligning, the data points to a healthy spot buying environment for SOL, paving the way for potential gains to $200 and beyond. $SOL
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