30s Summary

Solana (SOL) is trading over $180, a 16.3% increase, pushing towards $200. This is backed by onchain and derivatives metrics showing a steady increase in the total value locked (TVL) in Solana’s network. Deposits on Solana’s network hit a high of 42.5 million SOL on October 26, largely driven by Jupiter, Raydium, and Sanctum. Solana has now surpassed BNB Chain in TVL and has led decentralized exchange volumes, with a majority of the activity coming from the memecoin sector. However, the sustainability of this increase is uncertain. The current funding rate of 0.01% for SOL futures suggests this rally is in its initial phase.

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Hey folks, Solana (SOL) is back trading over $180, after a tricky three months of trying to get back up there. This solid 16.3% climb to $183 has been happening at the same time as Bitcoin was within $1,000 of its all-time high. But, is all this action for Solana backed by reliable data?

If you check out what’s going on with onchain and derivatives metrics, it looks like Solana’s upswing might just be starting. Chances are we could see it head towards $200 and possibly even above. There’s data showing a steady increase in the total value locked (TVL) in Solana’s network, reaching a 2-year high.

Recently, on Oct. 26, Solana’s network saw deposits hit 42.5 million SOL, which is the highest it’s been since September 2022. Some of the main drivers behind this have been Jupiter, with a 13% increase in deposits over the last month, Raydium, with an 18% boost, and Sanctum, bringing in 17% more during the same time.

When it comes to decentralized applications, Solana is now outdoing BNB Chain, taking second place in terms of TVL, though Ethereum is still leading. Solana’s growth can be seen in multiple ways, like Binance’s SOL liquid staking service which ranks tenth in Solana’s ecosystem, hinting at more room for growth.

For comparison, Ethereum’s TVL rose slightly, about 2% in the past month, while BNB Chain saw a 5% drop. But let’s keep in mind that only looking at deposit numbers can be misleading. Many decentralized applications, from games, collectibles, Web3 infrastructure, to social networks and marketplaces, don’t need large deposits.

Now let’s talk about decentralized exchange (DEX) volumes. Recently, Solana has managed to get ahead of Ethereum, maintaining the lead with a 19% boost over the past week. Ethereum, on the other hand, had a 6% uptick, while BNB Chain slipped 3%.

Raydium, Lifinity, and Phoenix have all had major volumes in the past week within the Solana ecosystem. A large chunk of Solana’s increased activity came from the memecoin sector. However, keep in mind, these kinds of increases might not be long-term. Sure, some memecoins have managed to hold their value, but historically, only a few manage over the long haul.

Lastly, let’s consider leverage use. So far, the SOL futures show the current rally to $182 on Dec. 29 is only the initial phase of a larger bull cycle. The current funding rate of 0.01% indicates that buyers using leverage are footing the bill, at a rate of about 0.9% per month. When there’s high demand, this rate can go over 2.1% per month; so, at present, it’s considered neutral. Coupling this with positive onchain metrics suggests robust SOL buying, leaving room for gains towards $200 and beyond.

Just a gentle reminder: This is just for your information, and shouldn’t be treated as legal or investment advice. The perspectives shared here are solely mine and don’t necessarily represent the views or opinions of Cointelegraph.

Source: Cointelegraph