According to the report from Cointelegraph, Solana’s (SOL) native token experienced a noteworthy 22% bounce back, following a dip to the $180 support level on February 3rd. Despite a recovery to $215, SOL is still 27% off from its record peak on January 19th. This downturn has negatively impacted traders’ mood as evidenced by the SOL futures market, where a crucial sentiment indicator has fallen below the neutral mark.
Generally, monthly SOL futures contracts are traded at a premium compared to spot prices, due to the additional risk sellers bear with the extended settlement period. In normal market conditions, this annualized premium fluctuates between 5% to 10%. A reading below this range indicates a decrease in demand from long positions (buyers).
At first glance, the current futures discount might imply that professional traders are doubting SOL’s bullish trajectory. Nevertheless, historical data shows that such positioning doesn’t always accurately predict market direction. In many instances, institutional players, including whales and arbitrage desks, misinterpret trend reversals. When most of the market bets on trend continuation, corrections tend to be sharper, especially as market makers adjust their positions.
A similar situation occurred in early October 2024, when the SOL futures premium dropped to 2% after a 13% price descent over three days to $140. This level turned out to be a local bottom, with SOL subsequently soaring 58% in the following 40 days, reaching $222. This highlights how derivatives market sentiment often lags behind, rather than being a reliable forecaster of future trends.
To evaluate whether SOL is likely to retest the $260 mark in the near future, investors need to consider key network metrics, such as usage trends, transaction fees, and potential growth drivers. Although some critics believe that the recent memecoin craze—exemplified by the Official Trump (TRUMP) token launch on Solana—was unsustainable, other revenue sources like gaming, social networks, and gambling could sustain the bullish momentum.
Over the past month, the number of active addresses interacting with the top ten Solana decentralized applications (DApps) has risen by 21%. In contrast, Base network experienced a 27% decrease in DApp activity over the same timeframe, while Polygon and Ethereum witnessed declines of 17% and 15% respectively, as per DappRadar data.
Solana’s total value locked (TVL) grew by 5.5%, outperforming its competitors. Solana’s market share has expanded from 6.7% in October 2024 to 9.5% currently, strengthening its position as the second-largest blockchain by TVL. Major contributors to Solana’s TVL growth include Meteora, which surged 162% in 30 days, Binance Staked SOL, up by 23%, and Marinade Finance, which gained 15%. These inflows allowed Solana to generate $246 million in monthly network fees—far outpacing Ethereum’s $133 million over the same period.
However, Solana is not immune to challenges, as users continue to report failed transactions, raising ongoing concerns about network reliability. Nevertheless, in comparison to other DApp-focused blockchains, Solana’s increasing adoption strengthens its long-term outlook and lays a solid foundation for further SOL price appreciation.
Please note, this article is for informational purposes only and does not constitute legal or investment advice. The views expressed here are solely those of the author and do not necessarily represent the views of Cointelegraph.
