In recent weeks, Solana (SOL) has experienced a remarkable rally, surging by over 50% in just two weeks. Data tracked by Paris-based cryptocurrency analytics firm Kaiko has shed light on the key drivers behind this surge. According to Kaiko, Nasdaq-listed digital assets exchange Coinbase (COIN) has emerged as a significant source of bullish pressure for Solana. The data reveals that since October 25, SOL’s cumulative volume delta (CVD) on Coinbase has increased by nearly $1 million, indicating a substantial influx of capital into the cryptocurrency.
Cumulative Volume Delta (CVD): A key metric for market sentiment
The cumulative volume delta (CVD) metric is a valuable tool for assessing market sentiment. It measures the net difference between buying and selling volumes over time, providing insights into the overall bullish or bearish pressures in the market. Positive CVD values indicate an excess of purchase volume, signaling bullish sentiment, while negative values suggest the opposite.
Kaiko analyst Riyad Carey pointed out that the median order size on Coinbase has been notably larger than on other exchanges, possibly indicating institutional interest in acquiring SOL through this Nasdaq-listed platform.
Coinbase’s leading role and VanEck’s bullish prediction
Coinbase’s prominence in the SOL market aligns with recent developments in the cryptocurrency space. Institutional asset manager VanEck has published a report outlining a bullish scenario that could potentially drive SOL’s price as high as $3,200 by 2030. This optimistic prediction is based on the possibility of Solana becoming the first blockchain capable of accommodating applications with over 100 million users.
Despite Solana’s impressive price gains, on-chain activity has not experienced a corresponding surge. Data from DefiLlama reveals that the total value of assets locked in Solana-based decentralized finance (DeFi) protocols has decreased from 12.03 million SOL to 10.23 million SOL in just two weeks, marking the lowest level since April 2021. While total value locked (TVL) is an imperfect measure, it is widely used to gauge the usage of smart contracts.
Solana-based decentralized exchanges have seen increased trading volume, and active addresses on the network have risen. However, these metrics have not seen a substantial uptick that would justify the recent price gains, according to on-chain analyst Patrick Scott.
What’s next for Solana?
As Solana continues to capture the attention of investors and institutions alike, the cryptocurrency market is closely watching for developments that could shape its future. The influence of Coinbase and the optimistic outlook presented by VanEck have added to the excitement surrounding SOL. However, the disconnect between price performance and on-chain activity raises questions about the sustainability of the current rally.
Market participants will be monitoring Solana’s ability to attract more users and developers to its ecosystem, as well as its capacity to support applications with massive user bases, as suggested by VanEck’s report. Additionally, the cryptocurrency’s resilience in the face of market fluctuations and its ability to adapt to evolving trends will be crucial factors in determining its long-term success.
