During a market dip, Solana gains 2%. Can $200 be reached?

solana

Despite its continued positive momentum, SOL’s TVL is still substantially lower than that of some of its rivals.

SOL, the native token of Solana, increased by 2% on March 14 even if it was unable to hold the $173 mark.

Notably, this movement took place in the midst of a 4% decline in the overall cryptocurrency market.

SOL’s price has increased by an astounding 36% since March 5 to $164, raising questions among investors about whether the conditions are still right for a $200 bull run.

U.S. inflation data and cryptocurrency regulations momentarily halt SOL’s pace

The Securities and Futures Commission (SFC) of Hong Kong issued a notification on March 14 that partially explains the decline in the cryptocurrency market.

According to the warning, the Bybit exchange is not permitted to provide lending or derivatives products in the region. According to CoinGlass, Bybit is the second-biggest derivatives exchange with a noteworthy $15.1 billion in open interest.

Additionally, market confidence was impacted by the most recent Producer Price Index (PPI) report from the US Labour Department.

The PPI report tracks average changes in the prices that domestic firms receive for their goods and services.

There was a 0.6% increase in the PPI in January and February, which made it less likely that the US Federal Reserve would lower interest rates on March 20.

SOL’s momentum might have also been hampered by Ethereum’s Dencun upgrade on March 13, which introduced lower fuel fees.

Analysts have observed that compared to Solana, transactions on Base, an Ethereum layer-2 decentralised exchange, are now far less expensive.

Base vs Solana
Base vs Solana

For example, on March 14, it was reported that the cost of a swap on the Solana decentralised exchange (DEX) was $0.37, whereas the same transaction on Base’s DEX only cost $0.02. Ethereum has improved, but there is still a lot of hype surrounding Solana’s memecoins and airdrops, including Dogwifhat (WIF), Bonk, and Jupiter (JUP).

When Coinbase, a well-known American exchange, published a website titled “How to Buy Jeo Boden (BODEN),” it pointed users to CoinMarketCap for listings, which was a noteworthy move for Solana’s SPL tokens.

Joe Weisenthal brought attention to this unusual mention on March 13. As of this writing, the post on the X social network has had over 621,300 views.

Apart from the anticipation of forthcoming airdrops, this pattern has resulted in a noteworthy surge in the utilisation of Solana’s decentralised apps (DApps).

Over the past seven days, Solana’s total value locked (TVL) has increased by 13%, while DApp volumes have increased by 24%.

Conversely, the top blockchain, Ethereum, experienced a minor drop in TVL but an 11% increase in DApp volumes.

Solana still lags behind BNB Chain and Arbitrum, which have deposits of $3.5 billion and $2.6 billion, respectively, in terms of TVL data.

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There is still a fair amount of demand for bullish leveraged SOL positions

Analysing the demand for leveraged bets in futures markets is essential to see whether traders are still upbeat about SOL after it hit its highest price in more than two years.

A funding rate is incorporated into the perpetual contract (inverse swap) with the objective of compensating for any prospective discrepancy in leverage demand.

Positive financing rates are indicative of a greater need for leverage from holders of long positions, and rates higher than 0.10% per eight hours, or 2.1% per week, are typically viewed as unsustainable and excessive.

Because of this, the current SOL financing rate of 0.05% is a little pricey for investors with long positions that use leverage, but this is normal in bull market conditions.

“Bullish leveraged SOL positions continue to attract significant demand.”

The Solana network is seeing an increase in activity despite worries about centralization and stability in comparison to Ethereum.

Solana (SOL) positions continue to attract significant demand
Solana (SOL) positions continue to attract significant demand

SPL coins have gained traction, being listed on several major centralised exchanges.

Due to the fact that investors are now more inclined to buy SOL tokens in order to take part in the several active airdrop programmes, the $200 target price now appears attainable.

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Written by
Rock Buivy
Over the years, I've dedicated countless hours to researching and analyzing various crypto betting platforms, understanding their features, strengths, and weaknesses. This knowledge has allowed me to produce in-depth, well-rounded reviews that help users make informed decisions when it comes to choosing the right platform for their needs.

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