Solana ($SOL) has recently surpassed Ethereum ($ETH) and BNB Chain ($BNB) in decentralised exchange (DEX) trading volume, securing 36% of the market share.
According to DeFiLlama, it recorded a DEX volume of $2.24 billion, while Ethereum and BNB Chain registered $1.41 billion and $703.19 million, respectively.
This shift highlighted growing investor confidence in the altcoin. It is also evidenced by its total value locked (TVL) exceeding levels seen before the 2022 bear market.
TVL is a measure of assets locked or staked in a particular protocol.
Despite Ethereum and BNB Chain experiencing higher weekly growth, Solana’s dominance in daily trading volumes can be seen as a significant achievement.
Factors behind the surge
Several factors contribute to Solana’s impressive performance. A key driver is the surge in meme coin trading on Solana’s decentralised applications.
Meme coins on the Solana blockchain have shown stronger performance compared to those on other networks, boosting demand for $SOL and increasing user engagement.
Additionally, the utility of Solana’s applications and its staking activities have also played critical roles in this upward trend.
Since the start of this year, the TVL in Solana’s decentralised applications has increased from $1.43 billion to hitting a peak of $5.83 billion, marking a 300% year-to-date rise.
It currently stands at $5.29 billion, surpassing pre-2022 bear market levels.
This growth reflected the increasing traction and utility of Solana’s platform within the decentralised finance (DeFi) space. It also shows how market participants are viewing Solana as a reliable platform.
Price trends
The price of Solana’s native token, $SOL, has surged by 600% over the past year, with current levels hovering below a key resistance level around $180.
Between 18 and 21 July, $SOL saw a significant price increase, forming four consecutive green candlesticks and reaching $185.21.
This movement has helped the altcoin form a double-rounding bottom pattern on the daily chart, often signalling the end of a bearish trend.
With the neckline set at $180.30, $SOL’s price may be poised for a breakout.
If the bullish trend persists, $SOL could potentially rise by about 13%, surpassing the psychological level of $200 and reaching $204.33.
In a highly optimistic scenario, the price might even hit $210.11, a level last seen in March.
The Moving Average Convergence Divergence (MACD) indicator, which measures a cryptocurrency’s trend, currently supports this bullish outlook. However, should enthusiasm wane, $SOL’s price could fall below $173.
At the time of press, Solana was changing hands for $176, trading in the green side of its charts as it was up by over 14% weekly.
Whale activity
Solana recently also attracted attention due to substantial whale activity. Whale Alert, a prominent blockchain tracker, reported that a significant transaction.
This involved a whale moving 196,068 $SOL, valued at approximately $35.16 million, to the Binance exchange. This large transfer has prompted speculation about a potential sell-off.
Historically, when whales transfer large amounts of cryptocurrency to exchanges, it often precedes a sell-off, as moving assets to an exchange provides liquidity for large sell orders.
Given Solana’s recent bullish trend, it is plausible that this whale intends to capitalise on recent gains by selling.
While such large transfers can trigger short-term price declines, the overall outlook for Solana remains positive.
Over the past month, $SOL has surged by about 34%, reflecting strong bullish momentum.
The potential approval of Solana-based exchange-traded funds (ETFs) could further enhance demand and price appreciation too.
Critical technological advancements, such as Zero-Knowledge (ZK) Compression, have also played a pivotal role in these achievements.
According to Helius CEO, Mert Mumtaz, these upgrades could improve blockchain metrics by up to 10,000 times, positioning Solana at the forefront of blockchain technology.
