Solana's SOL Surges Amid Cryptocurrency Rebound and Increased DApps Activity
Summary:
On November 28, Solana's native token, SOL, rose significantly, trading at $58, which is attributed to both the macroeconomic climate and Solana's potential in the crypto industry. SOL's increased activity in Decentralized Applications (DApps) and Non-Fungible Tokens (NFTs), along with competitive advantages over rivals like Ethereum, contributed to this success. Future challenges lie in potential large-scale sell-offs and the need for an open-source approach. However, SOL's sustained growth looks promising with over 40,000 active addresses in top DApps.
On November 28, the Solana blockchain's own digital asset, SOL, experienced an impressive 5.5% price hike, hitting a value of $58. The leap happened after SOL bounced back from its $54 support floor during the day before. While some credit SOL's strengthening to a wider cryptocurrency rebound amid a faltering macroeconomic climate, Solana's own infrastructure and surrounding ecosystem have been instrumental in propelling the value increase.
On the same day, the U.S. Dollar Strength Index (DXY), an indicator evaluating the American dollar against major global currencies, plunged to its lowest in three months. There is growing speculation that the U.S. Federal Reserve might halt interest rate hikes, pressuring the dollar downwards. This shift is prompting fixed-income investors to look overseas for higher returns, amplifying the dollar's selling pressure.
Also notable is the spike in gold price, up 1.5% to $2,043, hitting a peak for the last half year in response to declining U.S. Treasury yields. As the Federal Reserve signals an impending fall in interest rates, a lower return on fixed-income investments is anticipated. As a result, conditions accommodating risk-taking and the hedging of positions have been created, particularly if inflation stays above the long-term 2% target, benefiting both gold and cryptocurrencies.
SOL's hike can in part be attributed to its competitive advantage against digital currency giant Ethereum (ETH), which is facing costly transaction fees of over $7 on average in the recent fortnight. Conversely, Solana's standard non-voting transaction costs a mere $0.003, making it a far more attractive platform for a range of applications such as gaming, social media, gambling, NFT launches, and collectibles.
In the last week, Solana has seen a 10% rise in active addresses and a 9% increase in decentralized application (DApp) volume. Meanwhile, Ethereum saw a 21% drop in volume. Additionally, BNB Chain, ranked second, faced a 2% decrease in volume. Consequently, Solana has emerged as the leading blockchain among the top 10 in regard to gains in DApp activity.
Furthermore, Solana's NFT activity jumped 35% in the preceding week, equating to $24.5 million in sales, as noted by CryptoSlam. Despite a significant decline of 34% in worldwide NFT volumes across all blockchains, Solana saw a rise in unique buyers by 90% during the same timeframe. Standouts within Solana's NFT markets comprised the Mad Lads, Tensorians and Claynosaurz collections.
Despite these positive metrics, challenges for Solana remain. In September, SOL's price was negatively affected as investors feared a potential massive sell-off due to the liquidation of FTX's bankruptcy assets, which included over $600 million of SOL tokens. However, this concern subsided when it became apparent that most of these assets were tied up in vesting periods or staking, and the digital asset sales of the FTX estate were initially capped at $100 million per week, excluding Bitcoin (BTC) and Ether.
Notably, crypto wallet Code, based on the Solana blockchain, changed its licensing to the MIT License for its entire codebase. This open-source shift provides users with unrestricted access to copy, modify, and distribute the code. Code was established by the same creators who developed the Canadian messaging app Kik.
Even though the current culmination of macroeconomic factors undoubtedly contributes to SOL's recent price surge, we cannot disregard the increased activity on Solana's NFT and DApps, which has been significantly influential. Solana contrasts with rivals weighed down by large transaction fees and regulatory uncertainties, positioning it favorably for sustained growth.
With over 40,000 active addresses observed on the top six DApps during the past week, including Rarible, Jupiter Exchange, MeanFi, Raydium, and Magic Eden, SOL could potentially outstrip its Nov. 16 pinnacle of $65, equating to a $27.5 billion capitalization. In comparison, during the same period, only Uniswap and the newly launched Blast from Ethereum achieved similar activity levels.
Published At
11/28/2023 8:14:25 PM
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