Solana's SOL Token Rallies amidst Favourable Market Factors and Increased SPL Demand
Summary:
Solana's native token SOL increased by 5.5% on December 13, signaling recovery from its recent 16.7% fall. Key reasons behind this rally include the U.S. Federal Reserve's announcement about three interest rate cuts until 2024, increased demand for Solana's SPL tokens, integrations with big-name exchanges like Coinbase and Binance, and growing activity in Solana's DeFi and NFT markets.
On December 13, Solana's native cryptocurrency, SOL, surged by 5.5% reviving the $72 support level. This followed a less favourable four-day trend wherein the token suffered a 16.7% loss, falling from a peak of $77.80 on December 9 to a trough of $63.75. The driving forces behind this rebound and their ability to sustain the recent gains is currently under scrutiny.
The SOL rally was stimulated by three key elements, including the announcement by the U.S. Federal Reserve on December 13, signalling three interest rate slashes until 2024. Typically, diminished yeilds on fixed-income investments are seen to favour volatile assets like cryptocurrencies.
In a CNBC interview held on December 12, Rostin Behnam, Chair of the Commodities Futures Trading Commission (CFTC), asserted that conflicts among regulatory agencies are impeding the formation of explicit industry guidelines. Contrary to the stance of U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, Behnam holds the view that most tokens currently comply with laws pertaining to commodities and envisages a sustained crypto market.
In recent times, Solana has witnessed a surge in demand for its SPL tokens owing to collaborations with trading giants, Coinbase and Binance. Coinbase, for instance, initiated support for Solana's SPL tokens, beginning with Jito's (JITO) on December 7. The launch saw staggering interactions with 67 million tokens traded within five days. Additionally, Coinbase is scheduled to list another SPL token, BONK, on December 14.
The remarkable airdrop of Jito's liquid staking protocol, which presented over $14,300 to every participant based on JITO's prevailing rate of $2.90, triggered significant need for SOL tokens. To be qualified for future airdrops, traders are necessitated to engage with decentralised ecosystem applications.
The recent surge in prices is consistently represented in Solana's network data, exhibiting a 12% boost in 7-day transactions. Compared to this, Ethereum (ETH) marked a 1% drop and BSC Chain (BNB) reported a 4% uptick during the same phase.
Moreover, Solana's Dapps volume soared by 83% over the past week. Comparatively, Ethereum saw a 19% rise while BSC Chain experienced a 44% jump. Solana's key highlights include Rarible, the NFT marketplace with 510,940 active addresses, and Saber, the cross-chain DEX, accounting for $113 million in trading volume.
The total value locked (TVL) in the Solana network has skyrocketed to its highest since November 2022, before the FTX exchange crashed. The existing TVL of $930 million, marking an 80% surge over the past month, is attributed to the expansion of Marginfi, Kamino, and Orca. The increase in SOL token value reflects the progressing NFT market in Solana.
As per data, the NFT sector saw a substantial 56% boom in turnover, fuelled by sales in Tensorians and Mad Lads. In contrast, Ethereum NFT sales noted a 4% dip during the same timeframe, with leading collection, Bored Ape, recording a 57% weekly fall in volumes.
In brief, the upswing in SOL token price is credited to an advanced regulatory climate, a hike in the demand for SPL tokens and Airdrops, along with a more active network, bearing in DeFi and NFT markets.
This article is only informative and free of investment guidance or endorsements. Each investment and trading action involves risk, therefore, readers must undertake their own examinations before reaching a decision.
Published At
12/14/2023 7:51:54 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.