Solana Price Adjusts Amidst Doubts Surrounding Recent SOL Rally Triggers

Solana Price Correction Amidst Doubts

The price of Solana’s SOL token experienced a significant 36.6% increase in value between Oct. 30 and Nov. 2, reaching $44.50. However, it faced a 10% correction down to $40 on Nov. 6, leading investors to question the reasons behind the recent double-digit rally.

Key Developments and Events

During the Solana Breakpoint 2023 global conference in Amsterdam, SOL reached its peak at $44.50, the highest since August 2022. The conference saw the unveiling of Firedancer, a new client aimed at enhancing speed and reliability. Additionally, the Solana Foundation announced the availability of its network data set on Google Cloud BigQuery, enabling transparent and secure access to archival data and analytical insights.

• The approval of the v.1.16 update introduced confidential transactions for SPL tokens on the Solana network using zero-knowledge proofs.
• Decentralized liquid staking protocol Lido Finance ceased operations on Solana due to unsustainable financials and low fees.

Comparing On-Chain Activity

Solana’s on-chain data and ecosystem growth are under scrutiny. Comparatively, its total value locked (TVL) reached a low point, showing weakness in the network’s primary DApp metric. DApp deposits decreased by 30% in 30 days, raising concerns about Solana’s performance against its competitors like Ethereum and BNB Chain.

• Solana’s largest DEX, Raydium, recorded only 17,380 active addresses in the past 30 days.
• Star Atlas, Solana’s widely used game, had 12,420 unique addresses during the same period.

These figures pale in comparison to competitors such as PancakeSwap on BNB Chain, which boasted 513,060 active addresses in the last 30 days. Additionally, criticism emerged regarding the centralization of validators, with a significant portion receiving delegations from the Solana Foundation or Alameda.

Conclusion

Despite the recent price surge, Solana’s on-chain activity and ecosystem growth do not support further price increases. Investors remain cautious as doubts persist about the sustainability of Solana’s rally factors and the network’s ability to compete effectively with other blockchain platforms.