Increased activity in Solana’s NFT markets and decentralized applications are pushing SOL price back toward year-to-date highs.
Solana’s native token, SOL SOL tickers down $61, made significant gains of 5.5% on Nov. 28, trading at $58. This increase followed a retest of the $54 support level on Nov. 27. While some attribute SOL’s rise to the broader cryptocurrency market’s performance amid a deteriorating macroeconomic environment, the Solana network and its ecosystem have also played a crucial role in driving the price upswing.
On Nov. 28, the U.S. Dollar Index (DXY), which measures the strength of the U.S. dollar against major fiat currencies, hit a three-month low. Investors are increasingly betting that the U.S. Federal Reserve will cease raising interest rates, exerting downward pressure on the domestic currency. This sentiment has led fixed-income investors to seek higher yields abroad, resulting in selling pressure on the U.S. dollar.
Additionally, the price of gold surged by 1.5% to $2,043, reaching a six-month high, as U.S. Treasury yields declined. With the Fed signaling a forthcoming decline in interest rates, fixed-income investments are expected to yield lower returns. This has created an environment conducive to risk-taking and hedging positions, especially if inflation remains above the long-term target of 2%, favoring both gold and cryptocurrencies.
Solana’s gains can be explained by its competitive advantage
SOL’s momentum has surged, particularly as Solana competes with Ethereum, which has been grappling with high transaction fees averaging above $7 per transaction over the past two weeks. In contrast, the average non-voting transaction on Solana costs only $0.003, making it a more favorable choice for various applications, including gaming, social networks, gambling, nonfungible token (NFT) launches and collectibles.
During the past seven days, Solana saw a 10% increase in active addresses and a 9% rise in decentralized application (DApp) volume, while Ethereum faced a 21% decrease in volume. Additionally, the second-ranking BNB Chain experienced a 2% drop in volume. As a result, Solana emerged as the top-performing blockchain among the top 10 in terms of DApp activity gains.
Furthermore, Solana’s NFT activity surged by 35% in the past week, amounting to $24.5 million in sales, as reported by CryptoSlam. Despite the overall decline of 34% in global NFT volumes across all blockchains, Solana witnessed a 90% increase in the number of unique buyers during the same period. Notable highlights among Solana’s NFT markets included the Mad Lads, Tensorians and Claynosaurz collections.
Like & follow me