Solana’s native token, SOL (SOL), gained 8.5% on March 24, reclaiming the $142 mark for the primary time in two weeks. This rally mirrored the good points seen throughout the broader cryptocurrency market as merchants started to anticipate diminished dangers of an financial downturn. The rising threat urge for food can be seen amongst memecoins, a number of of which rallied by 12% or extra since March 23.
Outdoors of the broad market rally, SOL has its personal deserves, together with an increase in community exercise and the direct involvement of US President Donald Trump with the memecoin market. Moreover, rising curiosity from prime merchants on exchanges and the rising probability of a spot Solana exchange-traded fund (ETF) approval counsel additional potential for SOL’s worth development.
SOL/USD (inexperienced) vs. crypto market cap (orange). Supply: TradingView / Cointelegraph
Regardless of the latest rally, SOL has underperformed the broader crypto market by 23.7% over the previous two months. This weak spot is linked to a 93% decline in Solana community charges throughout that interval. The decline probably started with merchants’ disappointment within the memecoin sector however progressively affected all the decentralized utility (DApps) market.
SOL nonetheless trades 52% beneath its all-time excessive
Merchants now query whether or not the promoting was an overreaction, as SOL is at present buying and selling 52% beneath its all-time excessive of $295. This comes regardless of Solana remaining the second-largest blockchain when it comes to whole worth locked (TVL) and rating third in onchain volumes. For comparability, BNB is buying and selling 20% beneath its all-time excessive, and XRP is 28% beneath its peak.
Blockchains ranked by whole worth locked (TVL), USD. Supply: DefiLlama
Whereas Tron and BNB Chain present competitors when it comes to onchain volumes, deposits in Solana community’s sensible contracts are valued at $6.8 billion. In third place, BNB Chain holds 21% much less TVL, with $5.4 billion. Key highlights on Solana embody the Jito liquid staking answer, Kamino lending and liquidity platform, and the Jupiter decentralized alternate.
The charges on the Solana community at the moment are greater than these on the Ethereum base layer, surpassing $1 million per day. Extra importantly, Solana’s income has just lately reached its highest ranges in two weeks. Whereas nonetheless removed from the degrees seen two months in the past, the rise in Solana community exercise means that the underside might have been reached because the numbers proceed to enhance steadily.
Solana community day by day charges, USD. Supply: DefilLlama
As a comparability, Ethereum accrued lower than $350,000 in charges on March 23, resulting in a rise in ETH provide because the built-in burn mechanism did not offset weak blockchain exercise. Solana, alternatively, provides a 7.7% native staking reward fee, surpassing the equal 5.1% inflation fee, in keeping with StakingRewards knowledge.
Solana ETF determination nears whereas Trump tweet boosts memecoin momentum
Regardless of SOL’s worth weak spot, prime merchants on Binance have elevated their leveraged lengthy (bull) positions on SOL, in keeping with CoinGlass knowledge.
Binance prime merchants’ long-to-short SOL ratio. Supply: CoinGlass
The long-to-short ratio amongst prime merchants on Binance surged to 2.40 on March 23, its highest stage in over two months. A part of the joy will be attributed to the anticipation of the spot Solana exchange-traded fund (ETF) approval within the US.
The US Securities and Alternate Fee is anticipated to problem its last verdict earlier than the top of the 12 months, in keeping with Matthew Sigel, VanEck’s head of digital asset analysis. Though success will not be assured, the eventual spot Solana ETF approval would set SOL other than its rivals, including legitimacy to the asset, particularly amongst institutional buyers.
One other supply of momentum got here from a weekend social put up by President Trump, which explicitly talked about the TRUMP memecoin and helped to create a buzz within the sector. Within the Solana ecosystem, Fartcoin gained 15% on March 24, Dogwifhat (WIF) rallied 12%, and Pudgy Penguins (PENGU) traded up by 12%.
Finally, SOL has vital potential for greater good points, given the community’s TVL and charges, particularly compared to rivals, together with bullish positioning from whales utilizing leverage.
This text is for common data functions and isn’t supposed to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed here are the creator’s alone and don’t essentially mirror or symbolize the views and opinions of Cointelegraph.
