by Muhammad Ali
Amid a consolidating crypto market after early October’s upward rally, Solana (SOL) has stood out with impressive gains against the largest cryptocurrencies, making it one of the top performers of recent weeks. SOL led the CD20 Index with an 11% increase, while most other assets, including bitcoin (BTC) and ether (ETH), saw modest declines, with BTC down 2.5% and ETH dropping by 3.5%. At the time of writing SOL is trading at $173 SOL/USDT on Gate.io.
This surge propelled Solana to a new all-time high against Ethereum’s ether, surpassing the 0.064 level initially reached in August, according to TradingView data. Additionally, SOL outperformed Bitcoin, marking its highest level against BTC in over two months.
A Memecoin Frenzy Ignites Solana Activity
Solana’s rally has been buoyed by an explosion in memecoin activity and significant growth in network revenue. Much of the speculation has revolved around Solana-based decentralized finance (DeFi) protocols and a recent trend where AI-driven bots promote memecoins. The latest sensation, Goatseus Maximus (GOAT), rapidly ascended to a market cap of over $600 million within two weeks, following promotion by the Marc Andreessen-funded AI bot Truth Terminal. Created by an anonymous developer using Pump.fun on October 10, GOAT’s rapid ascent exemplifies the current blend of AI and memecoins on Solana’s network.
“This convergence of AI, memecoins, and blockchain has created a unique narrative in the crypto space,” said David Zimmerman, a DeFi analyst at K33 Research. “Over the past two weeks, AI-driven memecoins have captured major attention, with numerous tokens crossing the $100 million market cap threshold.”
The memecoin frenzy has fueled Solana’s network activity, driving transaction fees to record highs. According to Token Terminal, daily network revenue surged beyond $4 million, a tenfold increase from September’s lows. Meanwhile, active users on the Solana network also peaked, surpassing 8 million users—a record for the platform.
The uptick in transaction fees has also led to a substantial portion of newly issued SOL being burned. As over 15% of new token issuance is now destroyed, this increase in revenue is reducing the net inflation of SOL, benefiting long-term holders and investors.
The Rise of SOL Futures
The futures market has also seen a surge in activity, with open interest reaching over 18 million SOL, or $3.09 billion in notional value—its highest level since January 2023, per CoinGlass. Open interest rose by approximately 3 million SOL in the past four days, equating to $506 million.
Open interest indicates the amount of capital in active futures contracts and can suggest whether new capital flows into the market. Rising open interest, especially in SOL, typically reflects increased leverage, which could amplify volatility as traders position for either long or short movements. Funding rates for SOL perpetual are now at an annualized rate of 10%, indicating the dominance of long positions, where traders are betting on further price appreciation.
The Future of SOL
In 2024, Solana has marked a significant comeback, achieving high levels of user engagement, transaction volume, and price appreciation. Surging past $200 for the first time since 2021, Solana’s rise has been driven largely by its fast, low-cost infrastructure, which has proven ideal for high-volume activities like meme coin trading. This trend gained momentum as speculative trading around Solana-based meme coins such as Bonk (BONK) and Dogwifhat (WIF) saw massive growth, propelling Solana’s network activity and market presence. The platform’s high transaction speeds and minimal fees cater to traders and developers alike, contributing to its steady climb in market capitalization and popularity among new users.
Beyond the hype around meme coins, Solana’s ecosystem has expanded due to consistent technological improvements and community involvement. In 2024, new developments included integrating the Move programming language and improving Solana’s transaction processing, further enhancing network performance. This development-friendly environment has attracted thousands of active developers, with nearly 3,300 recorded at the close of 2023, positioning Solana as a hub for decentralized applications (dApps) across finance, gaming, and NFTs. As a result, Solana’s Total Value Locked (TVL) in DeFi reached around $4.3 billion in March 2024, indicating strong user interest and usage metrics.
With a robust community and continued adoption of DeFi and decentralized applications, Solana’s rise in 2024 reflects a broader demand for scalable, user-friendly blockchain platforms. However, while the meme coin craze has driven much of Solana’s recent popularity, some analysts caution about its long-term sustainability given these assets’ volatility and speculative nature. Nevertheless, Solana’s sustained commitment to infrastructure and ecosystem expansion may secure its position as a top blockchain platform in the years ahead
SOL in 2025
The Solana (SOL) price predictions for 2025 vary widely but generally reflect strong growth expectations driven by its technical advancements and ecosystem expansion. Some analysts predict SOL could reach highs between $247 and $300 in 2025. These predictions hinge on factors such as Bitcoin’s potential peak post-halving in 2024 and increasing regulatory clarity that may encourage institutional investments in Solana and other major blockchains. As Solana continues to improve its infrastructure and reduce network outages, these changes are expected to attract more developers and projects, particularly in DeFi and NFTs, which could further drive demand and support higher valuations.
While some forecasts are more optimistic, estimating SOL’s price could surpass $500 if favourable market and adoption trends continue, others remain cautious. For instance, concerns about regulatory actions could impact Solana’s growth trajectory, especially if the U.S. and other countries impose stringent regulations on digital assets classified as securities. This cautious stance suggests that while Solana’s performance could be strong, external market forces will significantly influence whether it reaches or exceeds these forecasted highs.
#blockchain #crypto, #decentralized, #distributed, #ledger