Originally published on: November 27, 2024
Solana investors can rejoice as the native token, SOL, has bounced back by 8% from its low of $222 on Nov. 26 to reach $237.72. Despite the recovery, some remain cautious after the sharp drop from its all-time high of $263.80 on Nov. 23, questioning the sustainability of the bull run. However, data from onchain and derivatives markets suggest that SOL still has room to grow.
Investor concerns have been fueled by SOL’s modest 1% gain compared to the broader altcoin market capitalization which surged by 12% between Nov. 20 and Nov. 27. Despite this, Solana has solidified its position as the second-largest programmable blockchain in terms of developer activity and user engagement. Its total value locked (TVL) has increased by 48% in the 30 days leading up to Nov. 27, showcasing strong fundamentals.
Key metrics like Jitoliquid stakingsolution, Jupiter decentralized exchange, and Raydium have seen significant increases in deposits, reflecting growing demand for SOL driven by its expanding DApp ecosystem. While some compare SOL to Ethereum, data suggests that both networks can grow independently, with Ethereum dominating the DeFi space while Solana excels in memecoin launches and trading.
To gauge trader sentiment on SOL following the recent decline, the futures premium is an important indicator. Currently, traders are paying a 23% annualized premium for long positions on SOL futures, signaling optimism. However, excessive bullishness could lead to liquidations during price corrections.
With strong onchain activity and positive derivatives market data, further price appreciation for SOL seems likely. Trading at a significant discount compared to Ethereum, there is ample room for growth for Solana. As investors await the potential for $300 SOL, the market outlook remains optimistic for this promising blockchain platform.