Coinfeeds Daily → Solana's SOL Token Surges 20% in 24 Hours, Reversing 18-Month Losses

Solana's SOL Token Surges 20% in 24 Hours, Reversing 18-Month Losses

Published: Nov 11, 2023 | Last Updated: Nov 11, 2023
Howard Kane

FTX Group's SOL Holdings and Solana Ecosystem Growth Contribute to Rally

Solana's SOL Token Experiences Significant Rally

Solana's native token, SOL, has seen a significant rally in its value, experiencing a 20% surge in just 24 hours. This surge has reversed the losses the token has experienced over the past 18 months. SOL is currently trading near $54, a level it last reached after the collapse of Terra Luna in May 2022. This price increase is notable, considering it comes in the wake of Solana's annual conference and despite concerns surrounding FTX Group, a major holder of the SOL token.

FTX Group's Impact on SOL's Value

The surge in SOL's price could potentially benefit FTX's creditors. This is because the price increase brings the asset into a range that may help compensate customers affected by the recent conviction of FTX CEO Sam Bankman-Fried for stealing customer funds. However, for this to occur, the price would need to hold at this level for an extended period, as a significant portion of FTX's SOL holdings are locked up until 2027 or later.

Factors Behind SOL's Rally

Despite the continuous selling of SOL tokens by FTX's bankruptcy estate, investor enthusiasm for SOL's price increase remains high. This enthusiasm may be attributed to the fact that some of the tokens from the bankruptcy proceedings are either vested or locked, and there is a weekly sale limit of $100 million. SOL's resilience during the FTX bankruptcy token dump is impressive, and its substantial weekly gains have pushed its futures open interest to $745 million.

Growth Within the Solana Ecosystem

There is evidence of growth within the Solana ecosystem. Solana's total value locked (TVL) has reversed its declining trend, and the number of active addresses has grown by 28%. This growth is indicative of increased deposits and the usage of decentralized applications (DApps) within the Solana ecosystem.

Concerns About SOL's Bull Run

Despite the positive signs, there are concerns about the sustainability of SOL's bull run and its valuation compared to other networks. While there is no excessive leverage demand observed in SOL derivatives contracts, the fundamentals suggest limited room for further upside.

Other Cryptocurrencies See Gains

Other cryptocurrencies have also seen gains. For instance, Tron (TRX) and Optimism (OP) have experienced increases in their values. However, SOL's recent growth has been particularly notable, adding more than $3 billion to its market cap in just one day and bringing it close to overtaking USDC in terms of market capitalization.

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