Solana’s Bull Run: A Resilient Rise in the Face of Bankruptcy

Solana Surges with Record High in 2023 – Factors Driving the SOL Rally

Solana’s price reaches a new high in 2023. What’s causing the SOL rally?

Hold on to your seats, digital asset investors, because Solana’s native token, SOL, is on a wild ride that’s leaving everyone in awe. This token, known for its resilience and ability to defy odds, experienced a jaw-dropping 22% surge on November 10th, smashing through the $54 mark for the first time since May 2022. And you won’t believe what happened next!

Get this, folks: this extraordinary surge happened while FTX’s bankruptcy estate was in the midst of selling off SOL tokens. Talk about selling like hotcakes! It turns out the Delaware Bankruptcy Court approved the sale of a whopping 55.75 million SOL tokens, previously part of the failed exchange’s assets. Does bankruptcy stock suddenly have this magical effect on token prices? Who knew?

Now, you might be scratching your head, wondering how in the world SOL managed to skyrocket in the face of all this selling. Well, dear reader, it seems that the limited impact of the sales and the fact that some of the tokens were either vested or locked actually became a cause for celebration among investors. They went from being afraid of asset liquidation to feeling hopeful about SOL’s future. It’s like watching a miracle happen in the crypto world.

And let’s not forget our ever-charming trader and independent analyst, Bluntz, who summed up the situation in the most delightful way possible on the digital streets of X (formerly Twitter). As Bluntz so eloquently put it, “Once this seller is gone, I can only imagine how hard it’s gonna pump.” Oh, the dreams we dream, Bluntz!

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Now, let’s dig a little deeper into SOL’s exhilarating journey. This token’s magnificent 39% weekly gains have pushed its futures open interest to a staggering $745 million. That’s right, folks, we’re in the big leagues now! But hold your horses, because in the futures markets, we need to consider both leverage longs and shorts for the full picture.

For those not familiar with the terms, leverage longs are the buyers demanding more leverage, while shorts are the sellers requiring additional leverage. It’s like a never-ending dance of demands and desires. And it’s important to note that SOL’s current futures funding rate stands at 0.5% weekly cost for leverage longs. That might sound like a lot, but given SOL’s unstoppable bullish momentum, it’s just a drop in the digital ocean.

Now, you might be wondering if derivatives markets played a significant role in SOL’s extraordinary rally. But fear not, for there is solid evidence that goes beyond that narrow scope. We’re talking about growth, my friends. Growth in deposits and the usage of decentralized applications (DApps) within the Solana ecosystem.

Solana’s total value locked (TVL), a measure of the amount deposited in its smart contracts, has gone from a downward spiral to a glorious reversal after six consecutive weeks. It’s like watching a phoenix rise from the ashes. And don’t get me started on DApps deposits, which have seen a 10% surge in the last three days. Sure, they might not be at their pre-bankruptcy levels yet, but this upward trend suggests that the worst is behind us. Hallelujah!

To validate this movement, we must take a closer look at the number of users utilizing active addresses. And boy, oh boy, Solana has proven its worth in that department. With a whopping 28% growth in the number of active addresses, Solana now holds the prized position of being the fourth-largest blockchain in decentralized finance (DeFi) TVL. Meanwhile, Ethereum, the once-glorious market leader, faced a devastating 22% drop in DeFi active users. Ouch!

But wait, there’s more! While SOL token bulls frolic in the increased network activity and higher TVL, Solana’s market capitalization of $22.8 billion has left Polygon in the dust. It’s like comparing a Tyrannosaurus rex to a chihuahua. Both networks have comparable DeFi TVL, yet SOL has triumphed, leaving investors wondering if this bull run can continue its reign above $54.

And let’s not forget the numbers—oh, the numbers! Solana’s recent rally resulted in the protocol accumulating $1.9 million in fees over 30 days, leaving Polygon’s $1.6 million in the dust. But before we jump for joy, let’s not forget that BNB Chain recorded a whopping $9.1 million in fees. It does make you pause and think about SOL’s valuation after its recent rally.

So here we are, dear reader, at the crossroads of a thrilling and remarkable journey. There’s no evident reason to bet against the trend, especially when there’s no excessive leverage demand observed in SOL’s derivatives contracts. But hold on to your wallets, because the fundamentals might indicate limited room for further upside.

But hey, who am I to tell you what to do? As a digital asset investor, you’ve got your instincts, your wit, and your charm. So, turn to the crowd, jump on the hype train, or tiptoe along cautiously. Just remember, the crypto world is full of surprises, and SOL has proven time and time again that it loves to dance to its own rhythm.

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