Solana (SOL) surged to $183 for the first time in three months, as on-chain metrics turned bullish and a strong overall rally of all crypto markets lifted prices. The bump in Solana’s price happens as Bitcoin nears its all-time high, with fanning rumours of a run toward $200 for Solana in the coming weeks. This new development is raising the spirits of both traders and investors as they keep watchful eyes on the trend and turn.
Rising Network Activity and TVL Growth Indicate Strong Solana Performance
One of the vital driving forces behind Solana’s price rise has been an increase in Total Value Locked (TVL) on its network. As of October 26, the network’s total value locked (TVL) topped its peak in just two days after hitting deposits worth 42.5 million SOL, striking a mind-shattering all-time high. Meanwhile, inflows into protocols such as Jupiter, Raydium, and Sanctum are also up based on the figures for the past 30 days, highlighting buoyed interest in Solana’s decentralized finance (DeFi) ecosystem.
Solana is now the top-second-largest network by liquid TVL, behind Ethereum and ahead of BNB Chain in terms of decentralized applications. The move in this ranking demonstrates just how competitive Solana has become given the progress it is making on liquid staking solutions, such as the recent launch of Binance’s SOL staking service.
Solana Outpaces Ethereum in DEX Activity and Memecoin Momentum
Solana has also outperformed in decentralized exchange (DEX) trading volumes, surging 19% this week to hold the lead over Ethereum. Meanwhile, leading Solana DeFi projects, Raydium, Lifinity and Phoenix were the biggest gainers in terms of volume. Lifinity alone saw a 49% increase over seven days.
Notwithstanding the exciting increase in DEX activity on Solana, a large part of this comes from memecoins with abundant popularity within its ecosystem. This inflow also resulted in tokens such as Moo Deng (MOODENG) and Goatseus Maximus (GOATESU) posting over 70% percent gains which increased trading volumes for Solana. However, the sensitivity of memecoins could cast a shadow on how good this growth is.
SOL’s Moderate Leverage Use Leaves Room for Price Expansion
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Beyond on-chain metrics, the derivatives market does not paint an ominous picture of Solana’s over-leverage. SOL futures funding is balanced at 0.01%. The even rate suggests there is demand but that it has not reached a sufficient amount to cause such large corrections, building the way for less volatile spikes in price later on.
During periods of heightened speculation in the past, dealers would drive this rate to over 2.1% per month based on high demand from retail buyers; as a result, leveraged positions found themselves becoming vulnerable to sharp changes in market sentiment.
However, the current neutral levels also represent that market players are holding cautiously optimistic stances. This conservatism reduces risks, it helps ensure that a full scale plunge is unlikely and so while the move goes to $200, it would be slow and steady without the typical volatility that accompanies excessive leverage.
Equally balanced leverage use and solid on-chain fundamentals would enable $SOL to experience a continuous upward trend volume & price, therefore the asset has the capacity to climb higher without immediate correction pressures. The latter would likely encourage more institutional investment as investors often read moderate leverage as a signal of slow, steady growth compared with over-leveraged funding indicative of bubbles.
Conclusion
Recent data suggesting that Solana has maintained strong fundamentals is contingent upon a move towards $200. Rising TVL, strong DEX volumes and sensible leverage in futures markets suggest Solana is well-placed to profit from returning investor interest. On the other hand, it remains to be seen how long this rally can last with memecoin-driven growth slowing down and wider market dynamics in play.
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