Solana’s Record $318 Billion Transfer Volume Is ‘Bot Driven’ — Will SOL Prices Fall?

The Solana blockchain has recently seen record highs in on-chain transfer volume, but market intelligence firm Glassnode claims that much of this activity is performed by bots.

Glassnode noted in an X post on November 19 that Solana (SOL) transfer volume hit an all-time high of $318 billion on November 16.

This is almost three times SOL’s entire market capitalization (currently around $112.5 billion). Solana’s total number of active addresses jumped to 22 million.

Nonetheless, the on-chain analytics firm noted that average and median trading volumes declined over the same period.

This raises questions about the veracity of Solana’s metrics. Because if growth is organic, it should be accompanied by a similar uptick in the average.

To explain this phenomenon, Glassnode said:

“This pattern of network activity inflation may be indicative of bot-driven activity, which has historically contributed to similar trends on Solana.”

Fees and network revenue appear to have increased recently due to increased activity.

Solana’s daily revenue hit a record high of nearly $6 million on November 20, with network participants paying $7.63 million in transaction fees, according to data from DefiLlama.

Solana reached an all-time high of $26 million in real economic value (REV) on November 19, according to additional data from Blockworks Research.

Layer 1 networks also have the highest decentralized exchange volume of all time, with Raydium accounting for 74% of Solana DEX trading volume at $5.13 billion as of November 19, according to DefiLlama data. ) recorded trading volume.

Nonetheless, a closer analysis of Raydium’s liquidity pools reveals that the protocol’s numerous liquidity pools have little to no liquidity and generate unrealistic trading volumes.

For example, the liquidity of the SOL-HAT pool was only $7, but the 24-hour trading volume was almost $400,000.

This suggests that bots and other inorganic trading activity could account for a large portion of Solana’s trading volume.

This is not the only time Glassnode has claimed the presence of weapons activity on Solana. On November 4, the company claimed that Solana’s “massive surge in on-chain transfer volume” was “driven by highly active wallets using multiple accounts.”

Likewise, Cointelegraph previously reported claims by pseudonymous researcher Flip Research that most activity on Solana was performed by bots.

Critics have suggested that Solana’s reported network activity figures over the past few months may have been artificially inflated due to wash trading of memecoins, which could fuel skepticism about the network’s actual growth trajectory.

SOL could “soar to $400.”

Nonetheless, Solana’s recent surge in network activity continues to pique investor interest as traders remain optimistic about Solana (SOL)’s prospects.

Titan of Crypto, a pseudonymous analyst, said SOL is likely to hit the $400 level as it appears ready to break out of its cup-and-handle pattern.

Veteran trader Peter Brandt shared similar sentiments, saying Solana’s rally over the past few weeks is likely to push the price further, setting a short-term target around $275.

“Often prices move in swings, and the prices in swings remain relatively the same. I’m sure Elliott traders have pretty accurate information (as they tend to do), but I just use the swing targets as a guide.”

Solana’s recent performance may be just the beginning of a larger bull market cycle. The price has risen 15% over the past 7 days and 43% over the past month, trading at $238 at the time of publication.

This rise helped its market capitalization reach an all-time high of $117.8 billion on November 18, solidifying its position as the fourth-largest cryptocurrency by market value.

This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.