Solana’s native token, SOL, is making waves in the crypto ocean, surging by a solid 8% on March 19. This comes as investors are feeling adventurous, diving into riskier assets ahead of the much-anticipated remarks from US Federal Reserve Chair Jerome Powell. While the interest rates are expected to remain steady, whispers of a softer inflation outlook for 2025 are creating ripples of excitement. And guess what? Solana’s onchain and derivatives metrics are hinting at even more upside potential for SOL.
The crypto market is dancing in sync with the US stock market, suggesting that SOL’s recent gains aren’t just a flash in the pan. It’s not about industry-specific news either, like the buzz about the SEC potentially dropping its long-standing lawsuit against Ripple. Nope, this is something bigger.
On March 19, the Russell 2000 index futures, which track US-listed small-cap companies, hit their highest point in twelve days. Amidst a general slowdown in decentralized application (DApp) activity, Solana is shining bright.
Now, let’s talk numbers. Solana’s total value locked (TVL) is climbing, reaching its highest level since July 2022. This is despite a 47% drop in onchain volumes over two weeks—a trend seen across other platforms like Ethereum and Avalanche. But Solana’s bullish momentum is undeniable.
By March 17, Solana’s TVL had climbed to 53.2 million SOL, marking a 10% increase from the previous month. In comparison, BNB Chain’s TVL rose by 6%, while Tron’s deposits took an 8% dip. Even with weaker DApp activity, Solana continues to attract deposits, proving its resilience.
Solana’s momentum is fueled by Bybit Staking, which saw a 51% surge in deposits since February 17, and Drift, a perpetual trading platform with a 36% TVL increase. Restaking app Fragmentic also recorded a 65% rise in SOL deposits over 30 days. In nominal terms, Solana holds its ground in second place for TVL at $6.8 billion, ahead of BNB Chain’s $5.4 billion.
Despite market downturns, several Solana DApps remain among the top 10 in fees, outperforming giants like Uniswap and Ethereum’s leading staking solutions. Solana’s memecoin launchpad Pump.fun, decentralized exchange Jupiter, and automated market maker Meteora are leading the charge in fees.
And here’s the kicker: Solana’s weekly base layer fees have surpassed Ethereum’s, which holds the top spot with $53.3 billion in TVL.
In the world of SOL derivatives, things are holding steady. Despite a 27% decline in SOL’s price over 30 days, demand for leveraged positions remains balanced between longs and shorts. The futures funding rate tells the tale.
Periods of high demand for bearish bets usually push the 8-hour perpetual futures funding rate to -0.02%, equating to 1.8% per month. When it turns negative, shorts pay to maintain their positions. The opposite happens when optimism reigns, pushing the rate above 0.02%.
Even with recent price dips, bears aren’t rushing to add leveraged positions. One reason? The reduced growth in SOL supply moving forward. A total of 2.72 million SOL will be unlocked in April, but only 0.79 million are expected for May and June.
In conclusion, SOL is poised to reclaim its $170 level from March 3. With resilient deposits, a lack of leverage demand from bears, and a reduced supply increase on the horizon, the future looks bright for Solana.
This article is for informational purposes only and does not constitute legal or investment advice. The views expressed are those of the author and do not necessarily reflect Cointelegraph’s views or opinions.
