Is Solana price primed for more upside now that SOL hit a new all-time high?

Solana’s native token, SOL (SOL), surged to an all-time high of $264.50 on Nov. 22, propelled by Bitcoin’s rally toward $100,000 and a frenzy around memecoins. This surge coincided with several Solana-based tokens gaining over 100% in value over the last month. Can SOL reach $350?

Solana has sustained over $6 billion in daily DEX trading activity throughout the past week, securing a 45% share of the overall market. This surge is unprecedented when compared to other networks, which has raised eyebrows, especially given Solana’s very low transaction fees relative to Ethereum (ETH), BNB Chain (BNB), and Polygon.

Certain market analysts suggest that SOL price could see further gains, noting that its current market cap of $121 billion remains 70% below that of Ethereum, and analysis of Solana onchain and derivatives metrics indicates potential. However, a broader perspective considering the broader competitive landscape is crucial.

Memecoin frenzy drives record DApp activity on Solana

Solana’s network boasts a total value locked (TVL) of $9.2 billion, giving it a 73% advantage over BNB Chain, which holds $5.3 billion in assets. In late July, both networks had a similar TVL of $4.5 billion, but the disparity has since grown. For context, the combined TVL across Ethereum’s leading layer-2 solutions—Base, Arbitrum, Polygon, Optimism, Blast, and Linea—also totals $9.2 billion.

Solana has managed to achieve a TVL comparable to Ethereum’s top six scaling solutions by providing lower entry barriers for users. A significant part of Solana’s appeal lies in the effortless integration of wallets like Phantom and Solflare with its key decentralized applications (DApps), leading to an unprecedented weekly trading volume of $41.1 billion on Solana’s decentralized exchanges (DEX).

Excluding Solana, all other top 10 blockchains experienced a significant decline in decentralized exchange (DEX) volumes, which is rather striking. DappRadar reports that 29.3 million unique active addresses have interacted with DApps on Solana over the last 7 days. For comparison, NEAR recorded 9.6 million addresses, opBNB had 7.8 million, and Base saw 4.6 million.

The allure of quick gains through memecoin trading has drawn in notable Bitcoin supporters, including internet personality ‘TylerDurden’. He candidly informs his followers that “Pumpenomics” is the primary catalyst for potential gains in Solana tokens, while warning them about other influencers who might use dubious methods to influence their audience.

Leverage presents another risk factor for SOL’s price, as excessive optimism among futures traders can lead to cascading liquidations. Even a standard 5% intraday price decline can trigger the liquidation of a position with 20x leverage.

Related: Why is Solana (SOL) price up today?

The funding rate for SOL futures reached a peak of about 4.2% per month on Nov. 22, which is not overly alarming. Currently, this rate has settled at a 2.4% monthly rate for long positions, just above the neutral point.

Although the Solana network’s onchain data might be skewed by its low transaction fees, the robust activity in DApps deposits and the resilience of SOL futures markets suggest a strong bullish trend. This indicates the potential for further price increases beyond the current all-time high of $264.50.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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