Solana’s native token, SOL (SOL), was trading at $58 on November 28 with a significant gain of 5.5%. This increase follows a retest of the $54 support level on November 27. While some attribute SOL’s rise to the performance of the broader cryptocurrency market amid a worsening macroeconomic environment, the Solana network and its ecosystem have also played a significant role in driving the price rise.
On November 28, the US Dollar Index (DXY), which measures the strength of the US dollar against major fiat currencies, hit a three-month low. Investors are increasingly betting that the U.S. Federal Reserve will stop raising interest rates and put downward pressure on the domestic currency. This sentiment has led bond investors to seek higher yields overseas, putting selling pressure on the U.S. dollar.
Additionally, gold prices rose 1.5% to $2,043, their highest in six months, as U.S. Treasury yields fell. With the Federal Reserve forecasting interest rates to fall in the future, bond investments are expected to yield lower returns. This has created an environment conducive to risk taking and hedging positions, especially when inflation exceeds the long-term target of 2%, favoring both gold and cryptocurrencies.
Solana’s profits can be explained by its competitive advantage.
In particular, SOL’s momentum has surged over the past two weeks as Solana competes with Ethereum, which has been struggling with high transaction fees averaging over $7 per transaction. On the other hand, Solana’s average non-voting transaction cost is only $0.003, making it a more favorable choice for a variety of applications including gaming, social networks, gambling, non-fungible token (NFT) launches, and collectibles.
Over the past seven days, Solana has seen a 10% increase in active addresses and a 9% increase in decentralized application (DApp) volume, while Ethereum has seen a 21% decrease in volume. Additionally, the trading volume of the second-largest BNB chain decreased by 2%. As a result, Solana emerged as the best blockchain, ranking in the top 10 in terms of DApp activity growth.
Additionally, as CryptoSlam reports, Solana’s NFT activity increased 35% in the past week, reaching $24.5 million in revenue. Despite an overall 34% decline in global NFT transaction volume across all blockchains, Solana has seen a 90% increase in the number of unique buyers over the same period. Notable highlights of Solana’s NFT marketplace include the Mad Lads, Tensorians, and Claynosaurz collections.
Challenges include FTX and lack of open source projects.
In September, the price of SOL came under downward pressure as investors feared a possible sell-off following the liquidation of FTX’s bankruptcy assets, which included more than $600 million in SOL tokens. However, these concerns emerged as it became clear that most of these assets were tied to vesting periods or staking, and digital asset sales of FTX assets were initially limited to $100 million per share, excluding Bitcoin (BTC) and Ethereum (ETH). has been alleviated.
Additionally, a significant change occurred within the Solana ecosystem as Code, the Solana-based cryptocurrency wallet, adopted the MIT license for its entire codebase. This open source approach allows users to freely copy, modify, and distribute the code without restrictions. Code was founded by the team that developed the Canadian messaging app Kik.
Related: Why Is Bitcoin Price Up Today?
In short, while favorable macroeconomic conditions have contributed to the recent surge in SOL token value, it is important to recognize that increased activity from Solana’s NFTs and DApps has also played a significant role. Unlike its competitors, which struggle with high transaction costs and regulatory uncertainty, Solana is well-positioned for continued growth.
With the network boasting over 40,000 active addresses across the top six DApps over the past seven days, including Rarible, Jupiter Exchange, MeanFi, Raydium and Magic Eden, SOL has surpassed its November 16 high of $65 ($27.50). There is a possibility that it will stand. 1 billion capitalized. In comparison, only Ethereum’s two DApps, Uniswap and the newly launched Blast, achieved similar levels of activity over the same period.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.