Solana (SOL), the native token of the Solana network, has been stuck below $145 since early July. This lackluster performance coincides with a broader crypto market slump that saw the total market capitalization drop 5% in just nine days. However, SOL has underperformed its peers, dropping 7.8% compared to BNB (6.5%) and ETH (6.5%).
Despite the bearish sentiment, on-chain data and SOL‘s derivatives market suggest a potential reversal. Here’s a breakdown of the current situation:
Network Activity on the Rise
- While Solana’s DeFi ecosystem, with tokens like DogWifHat (WIF) and Jito (JTO), has seen a decline, the network itself is experiencing growth in user activity and transaction volume.
- Over the past week, Solana’s DApps recorded a 19% increase in active users, while competitor chains like Ethereum and BNB Chain saw a decrease.
- Similarly, Solana DApps processed $703 million in transactions, a 12% increase compared to the prior week.
Solana vs. BNB Chain: A Battle for Second Place
- Solana’s total value locked (TVL) recently matched BNB Chain, a significant development. This indicates investors are deploying more capital on the Solana network.
- Notably, Solana boasts strong contenders in liquid staking with Jito, Marinade, and Kamino, all attracting significant deposits.
- Tron, another competitor, holds the second-highest TVL, but heavily relies on a single DeFi application, raising concerns about its overall stability.
Also Read: Solana (SOL) Eyes $160 Breakout: Can USDC Boost and Analyst Optimism Fuel the Surge?
Futures Market Hints at Balanced Demand
- Although SOL’s price struggles, its futures market shows no signs of excessive bearishness.
- Perpetual contract funding rates, which indicate leverage positions, are currently near zero, suggesting a balance between buyers (longs) and sellers (shorts).
Can Solana Break Above $145?
While predicting future price movements is difficult, Solana’s network fundamentals appear healthy. The recent increase in user activity, rising DApps volume, and a balanced futures market suggest a potential price rebound. Investors should closely monitor these metrics alongside broader market sentiment to gauge SOL’s future trajectory.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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