Solana prices hit 2+ year high — new SOL all-time high on the way?

Solana's native token, SOL (SOL), surged 35% between November 5 and November 11, reaching its highest level since December 2021 at 222. This has led traders to speculate that an all-time high of $260 could be reached, especially after Bitcoin breached $84,500, driven by institutional inflows and expected regulatory clarity in the United States.

SOL outperformed the broader altcoin market, which saw a 33% increase over the same six-day period. Investor optimism regarding SOL has been fueled in part by the expansion in Solana's smart contract activity, which is Total Value Locked (TVL).

TVL on Solana rose to $7.6 billion on Nov. 10, the highest since Dec. 2021. Key decentralized applications (DApps) such as Jito, Raydium, Drift and Binance's liquid inventory contributed to the 36 percent growth in deposits.

Solana's surge in activity isn't limited to memecoin trading.

There has been some valid criticism of Solana's reliance on memecoins, including DogwhipHat (YFF), Bonk (BONK), and PopCat (POPCAT), all of which have exceeded the $1.5 billion market capitalization threshold. Decentralized token launch platforms like Pump.fun are the main drivers behind the increase in Solana Decentralized Exchange (DEX) volumes.

The weekly DEX volumes on Solana were It rose to $17.1 billion in the week of November 2, a figure not seen since March 2024, and corresponding to a market share of 26%, surpassing even the leading DApp-focused blockchain, Ethereum. Solana manages to capture $88.2 million in monthly payments, which is necessary to address network security concerns.

In comparison, the Ethereum network, more than seven times as much as Solana in TVL, earned $131.6 million in monthly fees. Similarly, Tron, another blockchain that emphasizes base layer expansion, collected $49.1 million in payouts in 30 days. These figures do not include wider ecosystem revenues, which include notable contributions such as $100.2 million from Gito and $83 million from radium.

Evaluating platforms by TVL and fees alone can be misleading because not all DApps are large enough to be significant. However, adoption and attracting new users are critical to setting the stage for sustainable growth and increasing demand for SOL inventory and use.

For example, Magic Eden, Solana's leading non-reversible token (NFT) marketplace, recorded 77,160 active addresses in the last 30 days, as reported by Dapradar. In contrast, OpenSea, a comparable service on the Ethereum network, saw 37,940 active addresses in the same timeframe.

This data provides strong evidence of how the Solana network has attracted users beyond the memecoin frenzy, suggesting that the value of SOL will see further gains. However, to determine whether traders are over-utilizing their positions, one must analyze SOL perpetual futures.

Related: 80% of memecoins to flow after Binance listing by 2024

A positive funding rate indicates that long positions (buyers) are paying for leverage, which typically fluctuates between 0% and 2% per month in independent markets. An increase to 5% on November 10 indicated a temporary overstimulation, but the latest data from November 11 showed a neutral cost of 1.8% per month.

In terms of onchain and derivatives metrics, SOL appears to be on track to reach an all-time high, aided by network activity and no sign of overuse.

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.