Solana rallies 8% as crypto markets recover — Is there room for more SOL upside?

Solana's autochthonal token, SOL (SOL), roseate 8% connected March 19 arsenic investors turned to riskier assets up of US Federal Reserve Chair Jerome Powell's remarks. While involvement rates are expected to enactment unchanged, analysts expect a softer ostentation outlook for 2025. Meanwhile, cardinal onchain and derivatives metrics for Solana suggest further upside for SOL price.

The cryptocurrency marketplace mirrored intraday movements successful the US banal market, suggesting SOL's gains were not driven by industry-specific news, specified arsenic reports that the US Securities and Exchange Commission whitethorn drop its lawsuit against Ripple aft clinging to it for 4 years.

Russell 2000 small-cap scale futures (left) vs. SOL/USD (right). Source: TradingView / Cointelegraph

On March 19, the Russell 2000 scale futures, tracking US-listed small-cap companies, surged to their highest level successful 12 days. Despite a broader slowdown successful decentralized exertion (DApp) activity, Solana stands out. 

Solana’s TVL continues to rise

Solana’s onchain volumes dropped 47% implicit 2 weeks, but akin declines were seen crossed Ethereum, Arbitrum, Tron, and Avalanche, highlighting industry-wide trends alternatively than Solana-specific issues. The Solana network’s full worth locked (TVL), a measurement of deposits, deed its highest level since July 2022, supporting SOL's bullish momentum.

Solana full worth locked (TVL), SOL. Source: DefiLlama

On March 17, Solana's TVL climbed to 53.2 cardinal SOL, marking a 10% summation from the erstwhile month. By comparison, BNB Chain's TVL roseate 6% successful BNB terms, portion Tron's deposits fell 8% successful TRX presumption implicit the aforesaid period. Despite weaker enactment successful decentralized applications (DApps), Solana continued to pull a dependable travel of deposits, showcasing its resilience.

Solana saw beardown momentum, driven by Bybit Staking, which surged 51% successful deposits since Feb. 17, and Drift, a perpetual trading platform, with a 36% TVL increase. Restaking app Fragmentic besides recorded a 65% emergence successful SOL deposits implicit 30 days. In nominal terms, Solana secured its second-place presumption successful TVL astatine $6.8 billion, up of BNB Chain’s $5.4 billion.

Despite the marketplace downturn, respective Solana DApps stay among the apical 10 successful fees, outperforming larger competitors similar Uniswap and Ethereum’s starring staking solutions.

Ranking by 7-day fees, USD. Source: DefiLlama

Solana’s memecoin launchpad Pump.fun, decentralized speech Jupiter, automated market maker and liquidity supplier Meteora, and staking level Jito are among the leaders successful fees. More notably, Solana’s play basal furniture fees person surpassed Ethereum’s, which holds the apical presumption with $53.3 cardinal successful TVL.

SOL derivatives clasp dependable arsenic token unlock fears subside

Despite a 27% diminution successful SOL's terms implicit 30 days, request for leveraged positions remains balanced betwixt longs (buyers) and shorts (sellers), arsenic indicated by the futures funding rate.

SOL futures 8-hour backing rate. Source: CoinGlass

Periods of precocious request for bearish bets typically propulsion the 8-hour perpetual futures backing complaint to -0.02%, which equals 1.8% per month. When the complaint turns negative, shorts are the ones paying to support their positions. The other occurs erstwhile traders are optimistic astir SOL’s price, causing the backing complaint to emergence supra 0.02%.

The caller terms weakness was not capable to instill assurance successful bears, astatine slightest not to the grade of adding leveraged positions. One crushed for this tin beryllium explained by the reduced maturation successful SOL proviso going forward, akin to inflation. A full of 2.72 cardinal SOL volition beryllium unlocked successful April, but lone 0.79 cardinal are expected for May and June.

Ultimately, SOL is well-positioned to reclaim the $170 level past seen connected March 3, fixed the resilience successful deposits, the deficiency of leverage request from bears, and the reduced proviso summation successful the coming months.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.