Solana's SOL Soars As Activity Surges on Decentralized Exchanges Amid Memecoin Rally
Summary:
The Solana network's native token (SOL) surged by 19.5% between March 5 and 7, marking the first time it reached $150 since January 2022. This price increase occurred after Pantera Capital's plans to purchase $250 million SOL tokens from the bankrupt FTX estate. Activity on Solana's decentralized exchanges also observed significant growth due to a rally in memecoins, with other SPL tokens like Jupiter (JUP) and Raydium (RAY) witnessing a nearly 30% increase in the same period. Despite possible challenges, SOL's established momentum and the expanding Solana network point towards sustained growth.
The Solana's native token (SOL) saw a rise of 19.5% from March 5 to March 7, hitting the $150 mark for the first time since January 2022. Bloomberg's report of Pantera Capital's intention to buy $250 million worth of SOL tokens from FTX estate's bankruptcy ignited the price rally. With SOL's 47% rise over the past twelve days, traders are wondering if the altcoin can surpass the $200 mark and sustain its growth.
A highlight has been the surge in activity on Solana's decentralised exchanges (DEXs) due to a rally in memecoins. Even if Pantera Capital's bid is not approved, their proposal only constitutes a tiny portion of the $5.9 billion in SOL tokens held by the FTX estate, almost 10% of the total supply. Hence, the current bullish momentum is likely driven by other aspects such as the hype around Solana's SPL memecoins.
An array of celebrity-inspired and poorly-drawn tokens like Jeo Boden, Juses crust, and Spooderman grabbed the limelight on March 6 in terms of volume and performance. Although some may dismiss these trends as valueless, they engage investors to gamble on newly minted tokens within the Solana ecosystem and aspiring developers to fund their projects, subsequently affecting demand for SOL tokens and the use of its DEXs positively.
Furthermore, other SPL tokens like Jupiter (JUP) and Raydium (RAY) with functional utility or related apps escalated by nearly 30% from March 5 to 7. The DEX segment has also seen a rise from Jito (JTO) by 15.5% and Helium Mobile (MOBILE) by 14.5% within the same timeframe. The anticipation of airdrops such as Wormhole, Kamino, Parcl, and MarginFi is generating steady demand for SOL tokens.
Current data suggests that the SOL's bullish momentum relies heavily on Solana network's activity. There is a possibility that the hype surrounding airdrop and memecoins might slow down, or the FTX bankruptcy estate could impose additional constraints on the price upside. However, SOL's performance isn't solely dependent on specific SPL token performances; emerging protocols and use cases will also influence it.
The Solana network's smart contract deposits, measured by the total value locked (TVL), hit a 16-month peak on March 6, with 22.8 million SOL, a 33% rise from the previous month. In contrast, competitor BNB Chain's TVL rose by only 2.5% while Arbitrum's TVL dipped by 18% during the same period.
When it comes to the 30-day DApps volumes, Solana Dapps saw a rise of 311% while the Ethereum network witnessed a 7% drop No other top-10 competitor could compete with Solana's growth. However, there is still a significant difference in absolute terms compared to Arbitrum's $31.1 billion and BNB Chain's $25.2 billion monthly volumes. Ultimately, SOL reaching the $200 level might depend on the continued rise in demand for the Solana network in a very competitive industry.
This report does not serve as financial advice or recommendations. Every investment and trading decision carries risk, and readers are encouraged to conduct their own due diligence before making a decision.
Published At
3/7/2024 11:11:53 PM
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