Solana Faces Challenges Despite DeFi Growth, dApps Lag
Key Takeaways
- Solana (SOL) shows signs of exhaustion after a rise above 150 USD.
- Activity on the blockchain, particularly in decentralized applications (dApps), has decreased over the past 30 days.
- The total value locked (TVL) in Solana’s DeFi sector has surpassed the 5-billion-dollar mark.
- For the price to rise further to 200 USD, activity on the Solana blockchain needs to increase.
Recent Price Trends of Solana
Solana (SOL) has stabilized after a recent rise to 151 USD but is currently trading at around 144 USD. Despite this recovery, the price is still about 6% below its value from 30 days ago. The recent price increase was supported by the general recovery in the cryptocurrency market, where Bitcoin (BTC) and other altcoins also recorded gains.
On-Chain Data: Mixed Signals
On-chain data from Solana shows mixed signals. On one hand, the monthly active addresses on the blockchain reached a record high. On the other hand, the number of daily active addresses has significantly decreased in recent days. On September 19, 2024, the number of daily active addresses reached a yearly high of 5.5 million but has since fallen to 3.5 million. This decline suggests a slowdown in network usage, which could be an obstacle to further price increases.
dApp Activity Remains Weak
Another important indicator of activity on the Solana blockchain is the volume of decentralized applications (dApps). Data from DappRadar shows that dApp volume has decreased to 121 million USD over the past 30 days. This is a significant drop compared to the over 400 million USD recorded at the end of August. The number of transactions and Unique Active Wallets (UAWs) has also declined. For a sustainable price increase of SOL, higher demand for the token is necessary, particularly through interaction with dApps.
DeFi Sector Shows Growth
Despite the declining dApp activity, the DeFi sector on Solana shows positive developments. The total value locked (TVL) in Solana’s DeFi space recently surpassed the 5-billion-dollar mark. Within two weeks, the TVL increased by more than 500 million USD. This rise is driven in part by the Jupiter protocol, whose TVL has reached an all-time high. Further growth in DeFi activity could positively impact the SOL price as more users need the token for transactions on the blockchain.
Long-Term Outlook: Can SOL Reach 200 USD?
Despite positive developments in the DeFi sector, the ratio of long to short positions in the market indicates that the majority of traders are currently betting on falling prices. This suggests that confidence in a short-term price increase to 200 USD is limited. For a sustained rise, network usage, particularly in the dApp space, needs to increase again.
Our Assessment
Solana faces mixed challenges. While the DeFi sector on the blockchain is growing and locked capital is increasing, activity in the dApp space remains weak. For a rise to 200 USD, demand for SOL needs to increase through more intensive use of the blockchain. In the short term, a price rise to this level seems unlikely unless network usage picks up significantly.
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