Coinfeeds Daily → Solana's Rally Fueled by Coinbase Users and Institutional Interest

Solana's Rally Fueled by Coinbase Users and Institutional Interest

Published: Nov 03, 2023 | Last Updated: Nov 03, 2023
Howard Kane
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Coinbase's larger order sizes and institutions' growing interest contribute to Solana's surge

The cryptocurrency Solana (SOL) has seen a significant rally in recent weeks, with its value increasing by over 50%. According to data, a significant portion of this bullish pressure has come from Coinbase, a popular cryptocurrency exchange platform. The median order size on Coinbase has been larger than on other exchanges, suggesting that institutions may be showing interest in Solana.

Solana's Rally and Coinbase's Role

Solana's recent rally has been largely driven by buyers from Coinbase. The cumulative volume delta (CVD) for SOL on Coinbase has increased by nearly $1 million since October 25, indicating net capital inflows. The median order size on Coinbase has also been larger than on other exchanges, suggesting that institutions may be bidding for SOL through the Nasdaq-listed exchange.

VanEck's Bullish Report on Solana

This surge in Solana's value comes after a bullish report from investment management firm VanEck. The firm predicts a potential price of $3,200 for Solana by 2030. This optimistic forecast could be one of the factors contributing to the increased interest in Solana from institutional investors.

Decline in On-Chain Activity

Despite these price gains, on-chain activity for Solana-based DeFi (Decentralized Finance) protocols has seen a decline. The total value of assets locked in these protocols has decreased. While volume on decentralized exchanges and active addresses on the network have picked up, it is not enough to justify the price gains. This raises questions about the sustainability of Solana's recent rally.

Takeaways

While Solana's recent rally is impressive, it's important for investors to consider the broader context. The decline in on-chain activity for Solana-based DeFi protocols raises questions about the sustainability of these price gains. As always, potential investors should conduct thorough research and consider multiple factors before making investment decisions.

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