SOL hits new all-time high, so Solana price rises further?

Solana's native SOL (SOL) token surged to $264.50 on November 22 amid Bitcoin (BTC) rally to $100,000 and the frenzy surrounding memecoins. This increase coincides with several Solana-based tokens gaining more than 100% in value over the past month.

Can SOL reach $350 next?

Solana handled more than $6 billion in daily decentralized exchange (DEX) trading activity in the past week, giving it a 45% share of the total market. This increase is unprecedented compared to other networks, which raised eyebrows, especially considering Solana's very low transaction fees compared to Ethereum, BNB Chain and Polygon.

Some market analysts suggest that SOL's price could see further gains, with the current market cap of $121 billion remaining 70% below that of Ether (ETH) and analysis of Solana's onchain and derivatives metrics showing potential. However, considering the wider landscape of competition, a broader perspective is critical.

Memecoin Frustration records DApp activity on Solana

Solana Network has a total value locked (TVL) of $9.2 billion, which is 73% higher than BNB Chain, which holds $5.3 billion in assets. Both networks had the same TVL of $4.5 billion at the end of July, but the gap has grown over time. For context, the combined TVL of Ethereum's leading layer-2 solutions — Base, Arbitrum, Polygon, Optimism, Blast, and Linea — also totals $9.2 billion.

Solana has been able to achieve a TVL comparable to Ethereum's top six scaling solutions by offering users low barriers to entry. A significant part of Solana's appeal is its integration of wallets such as Phantom and SoulFlare with its key decentralized applications (DApps), bringing an unprecedented weekly trading volume of $41.1 billion on Solana's DEXs.

With the exception of Solana, all other top 10 blockchains experienced a significant decline in DEX volumes, which is rather impressive. Dapradar reports that 29.3 million unique active addresses have interacted with DApps on Solana in the past seven days. For comparison, Near saw 9.6 million addresses, opBNB 7.8 million, and Base 4.6 million.

Many well-known Bitcoin traders, including Internet personality Tyler Durden, have been drawn to the thrill of quick profits in memecoin trading. He candidly told his followers that “pampenomics” was the main driver for potential gains in Solana tokens, while other influencers might use dubious methods to influence their audience.

Leverage presents another risk for SOL prices as excessive optimism among futures traders can lead to losses. Even a normal 5% intraday price drop can result in a position liquidation with a 20x leverage.

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

On November 22, SOL futures reached a high of about 4.2% per month, which is not too scary. A monthly rate of 2.4% above the neutral point is set for long positions.

Although Solana Network OnChain data may be skewed by low transaction fees, the strong activity in DApp deposits and the resilience of SOL futures markets suggest a strong bullish trend. This indicates a potential upside from the current all-time high of $264.50.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.