The Beginning of SOL’s Upward Journey?

On March 1, solana’s native token, SOL, hit a 23-month high. It saw an impressive 34.5% increase in value within a week. This rise solidified SOL as the fourth largest cryptocurrency, excluding stablecoins. The price of SOL experienced significant gains. But is this just the beginning of rising prices?

SOL’s unprecedented growth

The rally had a period of consolidation as a backdrop, with SOL’s price trying to establish $100 as the support level. This shows that the recent increase has been gradual, not sudden. Before February 23, SOL saw only a modest 2% increase. This was in stark contrast to the 25.5% and 31.5% gains that Ether and Tron posted during the same period.

The increase in SOL’s price coincides with a report from The New York Times on February 27, which stated that Sam “SBF” Bankman-Fried, the former CEO of FTX, recommended SOL to prison guards. While the influence of SBF’s opinions on SOL’s price is speculative, the timing of the article’s publication is notable.

Analysis of the solana network

When analyzing the recent price increase of SOL, one must look at the metrics of the solana network. This is to determine whether the increased demand is driven by speculation or actual usability. The solana ecosystem plays a key role in this. SOL is used for various functions. Think DEX trading, staking solutions, NFT marketplaces and DApps.

An important measure is the total value captured (TVL) in Solana’s smart contracts. This peaked at 40.7 million SOL in November 2022. With a growth of 30% in 2024, Solana will surpass the TVL growth of platforms such as Ethereum and BNB Chain. This highlights the appeal of solana for DApp use.

Solana’s DApp ecosystem, specifically the OpenSea NFT marketplace, has generated $7.8 billion in weekly volume. This is evident from data from DappRadar. In addition to OpenSea, other solana DApps such as the Jito staking solution and the Saber liquidity exchange have also seen significant volume increases. These developments indicate a strong and growing platform, which could potentially lead to price increases in the future.