Originally published on: November 27, 2024
Solana’s native token, SOL, has experienced an impressive 8% surge after dropping to $222 in late November. Despite this recovery, doubts linger among investors due to the steep correction from its record high of $263.80 just days ago. The uncertainty around Solana’s bull run has left some questioning its future trajectory.
Investor sentiments have been mixed, especially as Solana saw only a modest 1% gain while the broader altcoin market capitalization soared by 12% in the same period. However, despite these fluctuations, onchain and derivatives data suggest that SOL still has room for significant growth.
One key factor supporting Solana’s potential is its strengthening fundamentals. As the second-largest programmable blockchain by developer activity and user engagement, Solana has seen its total value locked (TVL) rise by 48% in the past 30 days, showcasing a growing demand for SOL within its expanding decentralized application (DApp) ecosystem.
Comparing Solana to other networks like BNB Chain and Tron, it’s evident that Solana’s performance has been standout, with metrics like Jito, Jupiter, and Raydium experiencing substantial growth in deposits. These figures reflect the increasing interest in SOL and its DApp ecosystem.
While some view Solana as a competitor to Ethereum, both networks have shown the potential to grow independently. Ethereum’s onchain activity has surged in recent months, indicating a healthy ecosystem for decentralized finance (DeFi) opportunities. On the other hand, Solana has carved a niche in memecoin launches and trading, demonstrating its unique positioning in the market.
The futures premium on SOL futures suggests a sense of optimism among traders, with a 23% annualized premium currently being paid to maintain long positions. This high premium level indicates confidence in SOL’s future price appreciation, although excessive bullishness could pose risks in case of unexpected market corrections.
Considering Solana’s strong onchain activity, growing ecosystem, and relative discount compared to Ethereum, it’s plausible to anticipate further price appreciation for SOL. With its market capitalization still significantly lower than Ethereum’s, SOL has the potential to reach new heights in the near future.