In a week, Solana increases 34.5%, and network analytics indicate that more gains are possible


Can Solana maintain its current momentum now that it has surpassed a 23-month high? The volume of decentralised applications increased, but there’s a catch.

The native token of Solana, SOL, is currently trading up 34.5% in just one week after reaching its highest value in 23 months on March 1.

With stablecoins excluded, Solana is still the fourth-largest cryptocurrency, but it has been closing the distance with rival BNB, which is currently in third place.

The crucial queries are: What spurred SOL’s comeback and, more importantly, can this superior performance over rivals be maintained?

Over the previous few months, the price of SOL had been making an effort to hold onto the $100 support.

Therefore, claiming that the bull run started earlier than February 23 would be untrue. In actuality, between December 23, 2023, and February 23, 2024, SOL had a slight 2% growth, whereas Ether saw a 25.5% jump and Tron saw gains of 31.5%.

Basically, something happened in the last week that caused the decoupling in favour of SOL.

Apart from the significant increases on SOL, there was a noticeable increase in demand for a handful Solana SPL memecoins within the last week.

Since February 23, Bonk has increased by 110%, and DogWifHat (WIF) has seen a notable 250% rally within the same period. It is noteworthy that this pattern did not only apply to Solana network tokens; starting February 23, gains of about 51% have also been recorded for Dogecoin and Shiba Inu.

But it’s possible that part of the demand for these well-liked tokens spread to other tokens as traders looked to profit from DEX listings, which would have an effect on SOL.

According to a report that appeared in The New York Times on February 27, Sam “SBF” Bankman-Fried, the former CEO of the defunct FTX exchange who was jailed, had allegedly advised prison guards to invest in SOL. Nov. 2, 2023 saw the conclusion of SBF’s trial, during which seven charges of fraud and conspiracy were found guilty.

“Recent surge in SOL and other Solana tokens reflects growing investor interest and trading activity, potentially influenced by broader market trends and notable figures.”

The date of the article’s publication suggests that SBF’s opinion may have had some influence on SOL’s gains, even though this cannot be determined.

Solana network metrics should be examined in order to determine whether the current spike in SOL’s price has resulted in increased demand for the token, as opposed to just conjecture.

Fundamental components of this ecosystem include DEX trading, staking options, markets for nonfungible tokens (NFTs), and other decentralised applications (DApps) including gaming, social media, and gambling. All require SOL.

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Solana price

Solana’s TVL Surge: Implications for SOL Price and DApp Activity

The price of SOL may be impacted by the total value locked (TVL) in Solana’s smart contracts. A greater TVL could drive demand and favourably impact price by indicating more user engagement and interest for DApps based on Solana.

According to Solana’s latest data, the company has accomplished a notable feat: their TVL, which represents a 30% rise year-to-date in 2024, has reached 40.7 million SOL, the highest level since November 2022.

To put things in perspective, BNB Chain reported a 12% rise in BNB deposits since December 31, 2023, and Ethereum’s TVL in ETH terms climbed by 15% during that time.

This demonstrates how well Solana has been able to draw DApp activity in comparison to other platforms.

Additional investigation into the effects of this TVL expansion on the Solana network indicates that some DApps are able to handle high volumes and a sizable user base without requiring sizable deposits.

According to DappRadar, the OpenSea NFT marketplace is the main driver of Solana’s noteworthy increase, accounting for a significant weekly volume of $7.8 billion.

Other Solana DApps have seen notable volume increases even after removing this.

For example, in only one week, the Jito staking solution saw an incredible 102% rise, and in the same period, the cross-chain liquidity exchange Sabre witnessed an impressive 130% spike in volume.

A portion of Solana’s success can be attributed to the difficulties other blockchains have handling abrupt surges in transaction volume.

Solana: DApps volume ranking past 7 days
Solana: DApps volume ranking past 7 days, USD. Source: DappRadar

For example, inscription-related problems caused a block production pause on February 23 in the Avalanche network.

Even if Solana has faced difficulties of its own, like a five-hour outage on February 6, admitting these issues lessens their detrimental effects and highlights the industry’s general scaling issues.

Nevertheless, there is no indication from network data that the SOL token is peaking.

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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.