In this article, we take a look at Solana’s on-chain data and the trend of crypto SOLs.
Since November 2022, the month of the FTX exchange collapse, despite the recovery of the crypto market, the crypto network has not been able to recover the lost TVL.
The public in the DeFi world on Solana, discouraged by the various storms during the bear market, has not come back as strong as it was then.
On the other hand, the SOL currency has shown all its strength in 2023, not only returning to the FTX pre-dump price level, but exceeding it by a good 30%.
What would happen to SOL if Solana’s LTV returned to $1 billion and above?
What does the future hold for Solana’s blockchain and its crypto SOL?
All the answers below.
Summary
On-chain analysis of the Solana network
The Solana blockchain does not seem to have the same success as the SOL cryptocurrency on the price front in the wider cryptocurrency market.
The on-chain data speaks for itself for the decentralised network, which, despite being one of the top 10 infrastructures in the web3 landscape, is failing to return to the glory that marked the bull market year of 2021.
With an LTV of USD 446 million, SOL is still about 55% less valuable than the total assets locked in the blockchain before the disastrous collapse of the FTX exchange (the project’s main backer).
Then there’s the fact that in November 2022, TVL was nowhere near its highs, which are instead in the $9.7 billion range and were reached exactly one year earlier.
Since 1 January 2023, we have seen a slight upturn in this metric, with capital more than doubling within the landscape of decentralised applications on Solana, but we are still a long way from declaring a real ‘turnaround’.
It is not only capital that is missing from the roll call of platforms operating on Solana, but also, and above all, active users on the network.
In fact, April 2023 saw the lowest number of active addresses ever recorded, and this trend has continued until today, with only a brief and temporary recovery in May.
At the moment we can count a daily average, calculated on a 7-day basis, of 250,000 active addresses.
In November 2022, this number will be twice as high. In May 2022 it will be five times higher.
However, the metric that gives the best idea of the decline in cryptographic activity on Solana from 2022 onwards is that of ‘on-chain movement volume’.
While the volume recorded on the chain in November 2022 was around $300 billion, it is now just over $70 billion.
Compared to two years ago, when the decentralised ecosystem was at its peak, volumes are now 78 times lower.
USDC, USDT and SOL remain the most traded assets on Solana’s markets, but they lack the wealth component that characterised the chain back then.
Solana (SOL) crypto price analysis
While the on-chain data on Solana makes one wonder why the crypto network has not come back as strong as it was a few years ago, speculative activity has crypto traders dreaming of a quick price recovery for SOL.
Unlike the still bleeding TVL on the chain, SOL is back above its pre-FTX collapse value.
The cryptocurrency is now trading at $43.5 per unit, up 87% in the past month.
The capitalization of the coin is over $18 billion, making SOL the 7th most valuable cryptocurrency on the market.
Widening our horizons a little and looking at prices for 2021 and 2022, we can see that the road back to the highs is unfortunately still a long one.
However, it is clear that the last month of trading has been significant in terms of how quickly a rally can take place even in a bear market.
In the weekly time frame, SOL recently broke through the 50-period EMA, confirming the breakout in subsequent candles and laying the groundwork for another bullish leg higher.
Trading volumes have returned to acceptable levels, comparable to the Solana currency’s bullish phase in early 2021.
At this point, it is crucial for SOL to consolidate its structure without falling below $30, a support that marks the border between a possible recovery and beyond.
The RSI is in the overbought zone, so a small retracement between now and the end of the year could be a springboard for future rallies.
SOL is currently one of the best performing cryptos in the crypto markets over the past month.
When and if the network’s on-chain data starts to recover, we are likely to see some good things in SOL’s price action.
If only TVL would get back to $1 billion, the price of the crypto would probably be at least $70.
Probably in the next bull run this coin will be able to get back to at least $100.
