Solana’s SOL cryptocurrency has experienced tremendous growth, rising by more than 50% in just two weeks. Data shows that buyers from Coinbase, a digital asset exchange listed on Nasdaq, played a major role in driving up the price of SOL. Cumulative Volume Delta (CVD) on Coinbase has increased significantly, indicating net inflows into SOL. This suggests that institutions may be actively bidding to buy SOL through Coinbase. Coinbase’s leadership in the SOL market follows VanEck’s bullish forecast, which notes that the price of SOL could reach $3,200 by 2030. However, despite the price increase, SOL cross-chain activity has not seen a corresponding increase. The total value of assets locked in Solana-based DeFi protocols has actually declined, indicating a gap between price and usage.
Coinbase Buyers Fuel Solana’s SOL Rally
Overview of Solana’s recent rally
Solana’s cryptocurrency, SOL, has seen significant growth, rising more than 50% in just two weeks. This rise in prices has caught the attention of many investors and analysts who are trying to understand the factors driving this upward momentum.
Coinbase as a significant source of bullish pressures
Coinbase has become a significant source of upward pressure on Solana, according to data tracked by Kaiko. Kaiko data shows that there was a net capital outflow at Coinbase, indicating increased buying pressure on SOL. This influx of capital played a decisive role in increasing the price of the cryptocurrency.
Explanation of cumulative volume delta (CVD)
To understand buying and selling pressures in the market, analysts often rely on the Cumulative Volume Delta (CVD) measure. CVD is calculated as the net difference between the volume of purchases and sales for a given period. It gives an idea of the overall bullish or bearish sentiment in the market.
Comparison of CVD on different exchanges
Analyzing CVD across different exchanges can help identify the platforms where the majority of buying or selling occurs. In the case of SOL, CVD on Coinbase saw significant growth, indicating a higher percentage of purchase volume compared to other exchanges. Binance and Kraken also showed positive CVD, while Upbit showed negative CVD, indicating a higher percentage of sales volume.
Institutions bidding for SOL through Coinbase
The average order size on Coinbase was significantly larger compared to other exchanges, indicating the potential for institutional participation in purchasing SOL through Coinbase. This indicates that large institutional players are actively bidding to buy SOL on the Nasdaq-listed exchange.
VanEck’s bullish case scenario for SOL
Institutional asset manager VanEck released a report outlining an optimistic scenario for SOL. The report indicates that the price of SOL could reach $3,200 by 2030. This forecast is based on the assumption that Solana will become the first blockchain network to support applications with more than 100 million users.
Impact of SOL’s price gains on on-chain activity
Despite the astonishing rise in SOL prices, online activity has not shown the same level of enthusiasm. The total value of assets locked in Solana-based decentralized finance (DeFi) protocols has declined over the past two weeks. This decline in total value locked (TVL) is concerning as TVL is often used as a measure of smart contract usage and general activity on the platform.
Decline in assets locked in Solana-based DeFi protocols
According to DefiLlama, TVL in Solana-based DeFi protocols fell from 12.03 million soles to 10.23 million soles in just two weeks. This is the lowest TVL value since April 2021. While TVL is not a perfect metric, it does indicate a decline in smart contract usage and activity on Solana.
Increase in volume on Solana-based decentralized exchanges
While the decline in TVL is concerning, trading volume has increased on Solana’s decentralized exchanges. However, this increase in volume alone is not enough to justify the significant price increases seen by SOL. Analysts are closely monitoring the relationship between price increases and online activity to assess the sustainability of SOL’s growth.
Analyst’s observation on price gains and on-chain activity
On-chain analyst Patrick Scott noted that the recent rise in SOL prices is not fully supported by on-chain activity. This suggests that the current rally may be driven by speculative buying rather than fundamentals. Analysts like Scott are closely monitoring online developments to determine how sustainable SOL’s bullish momentum is.
In conclusion, Solana’s recent SOL rally was mainly driven by buyers from Coinbase. The increase in CVD on Coinbase, coupled with the increase in average order size, indicates significant institutional participation in buying SOL. However, despite the impressive price growth, cross-chain activity, as measured by the decline in TVL value, did not show a corresponding increase. Analysts continue to monitor the relationship between price increases and online activity to assess the sustainability of SOL’s growth.