Stepping out of the shadow of FTX's collapse? Solana, which performed well in January, merely benefited from the overall market's gains
Data performance in January exceeded expectations, but is Solana destined to always be behind Ethereum?Author: DeMan
The first month of 2024 has become history, and Solana has continued its vigorous upward trend this month, sparking speculation among many investors. The explosive growth of Solana has naturally boosted the popularity of its on-chain projects, even leading to some farcical events.
On February 1st, just hours before the Solana ecosystem trading aggregator Jupiter launched its JUP airdrop, the Ethereum chain's similarly named JUP token surged over 430%, only to plummet a few hours later. This blunder was inevitably interpreted by investors as some kind of metaphor between SOL and ETH. From an objective perspective, if we delve deeper into SOL's various data points, the recognition of this project may continue to rise.
1. Breaking the $100 Key Level, How Much Longer Can the Rebounding SOL Rise?
In terms of price, SOL broke through the key $100 level again on January 31, with a 25% increase over the past week. Some traders analyze that if SOL can break through the resistance level of $104 in the coming days, it is more likely to surpass the 2023 high of $123.68. Traders are also optimistic that the $78 level is a resistance point for SOL, and the possibility of this asset plummeting does not exist. Of course, this is largely due to the support from meme coins like Bonk and Dogwifhat, as well as the earlier mentioned $JUP listing on major CEXs such as Binance, Bybit, OKX, KuCoin, and HTX, which has brought attention to Solana.
Meanwhile, Bittensor (70%) and Helium (37%) on the Solana chain have also seen significant increases, suggesting a potential independent market trend. It is worth noting that Helium had its own blockchain before migrating to Solana in April 2023, boasting over a million hotspots. To support growth and further expansion, Helium has outsourced tasks like infrastructure support to Solana to save costs and achieve better scalability.
From a recent macro perspective, after the approval of the BTC spot ETF, the industry's major bearish sentiment has dissipated, and Grayscale's sale of GBTC has led to a dumping effect in the Bitcoin market, causing prices to fluctuate downwards. This has also shifted the attention of whale investors towards Solana and its on-chain projects.
2. Continuous Surge in Various Data, Has Solana Secured a Strong Start in 2024?
The rise in price is merely an intuitive reflection of the project's fundamentals. A comprehensive review of Solana's recent data performance may reveal even more findings.
- Continuous Increase in SOL Token Trading Volume:
Data shows that as of January 30, the trading volume of SOL and SPL tokens on the Solana blockchain has surged to $951.9 billion, with the network's economic throughput increasing by 30% compared to December's $735.8 billion. Additionally, the growth in trading activity on the Solana blockchain is significantly higher than most of 2023 and 2022 levels; in contrast, the trading volume on the Solana network was only about $40 billion in September 2023. 
- New On-Chain Address Count Hits New High:
Data indicates that the number of new addresses on the Solana network in January has surpassed 10 million, setting a historical high since May 2022, and it continues to increase. Analysts point out that the surge in new addresses may have some inflation, as the popularity of WEN has influenced the increase in new addresses, which is currently airdropping to over a million users; however, as of the time of publication, nearly half of the airdrops remain unclaimed.
- Explosive Growth in On-Chain Stablecoin Transfers:
According to Artemis data, as of January 22, the on-chain stablecoin transfer volume on Solana reached $303 billion, surpassing the December 2023 on-chain stablecoin transfer volume ($297 billion), and representing a 2520% increase compared to January 2023 ($11.56 billion). The market share of on-chain stablecoins on Solana is currently close to 32%, a significant increase from the 1.2% share a year ago. On-chain stablecoin activity on Solana began to rebound in October last year and has since steadily grown by 650%.
In addition, the pre-order volume for the second-generation Solana Mobile has exceeded 40,000 units, and the trading volume on Solana's DEX is second only to ETH. These performances indicate that this project, which once thrived but nearly fell into obscurity, has made a strong start in 2024.
3. Community Engagement and High Performance as the Fundamental Reasons for Solana's Revival, but Future Trends Remain Uncertain
In contrast to the recent bustling scene, Solana's darkest moments since November 2022 remain fresh in the memory of the entire industry. At that time, after the FTX collapse, the price of SOL plummeted from $236 to $13 within weeks, triggering extreme panic among investors. Amidst the despair, Solana remained in a state of extreme stagnation for over a year. However, the question of whether there are behind-the-scenes forces driving Solana's resurgence has become a hot topic of discussion.
The revival of Solana can actually be attributed to two decisive factors: community engagement and high performance.
In terms of community activity, Solana is the public chain with the strongest developer operational capabilities in the industry. According to an Electric Capital report, as of October 2023, there were over 19,000 developers in the blockchain ecosystem, with developers on Solana accounting for about 15% of the entire ecosystem.
In terms of high performance, Solana provides developers with lower costs and faster transactions, offering users a better experience. With the development of consumer onboarding toolkits around Solana, more and more developers will build on it. Additionally, Solana's high throughput and low transaction costs make it possible to create consumer-level applications, such as developers being able to send a million NFTs for just a few hundred dollars.
Moreover, the overall market recovery in the second half of 2023 is also an important reason for Solana's emergence from its slump, although this alone cannot be considered a winning formula. With the possibility of the U.S. entering a rate-cutting cycle in 2024, whether Solana can maintain its growth momentum in a new bull market, and even aim for the leading public chain Ethereum, remains to be seen.
