Key takeaways:
Solana ETFs and ETPs saw $706 million in weekly inflows, exceeding XRP’s $219 million, according to CoinShares.
SOL funding rates remained below the 6% neutral level, indicating a diminished interest in leveraged bullish positions among traders.
Solana’s native token, SOL (SOL), rose to $229 on Tuesday after a brief dip to $218. This surge followed positive market reactions to the US Federal Reserve’s minutes from its Sept. 17 meeting, which boosted expectations of interest rate cuts in 2025.
Traders are optimistic that SOL could reach the $300 target, which seems plausible given the strong bullish sentiment in derivatives metrics and on-chain data.
Solana experienced a 22% rise in seven-day network fees due to increased activity on decentralized exchanges (DEXs). In contrast, Ethereum, its main competitor, witnessed a 21% decline in network revenue during the same timeframe. Solana continues to lead in transaction count, surpassing the combined totals of Ethereum and its layer-2 solutions.
DEX volumes on Pump surged by 78% over the past week, with Meteora and Raydium seeing increases of 73% and 46%, respectively. Solana reclaimed its top spot in decentralized exchange activity, amassing $129 billion in 30-day volume, outpacing Ethereum’s $114 billion, per DefiLlama data. Notably, Hyperliquid, the fastest-growing contender, has stagnated around $31 billion.
Solana network activity increases
Network fees play a critical role for any blockchain focused on decentralized applications, especially as revenue helps counteract inflationary pressures. Maintaining validators incurs costs, and staking participants seek reasonable returns. Weak network activity can deter holding the native token and may provoke sell pressure.
Solana’s total value locked (TVL) grew by 8% in the last 30 days, further bolstering network fees. Top performers include Kamino with a 20% rise, Drift at 12%, and Orca at 12%. In contrast, Ethereum’s TVL climbed just 3%, while Tron deposits increased by 6%. Consequently, Solana has solidified its status as the second-largest network with a TVL of $14.2 billion, boasting an 8% market share.
The rapid growth of activity on the Aster perpetual futures platform has redirected traders’ attention to BNB Chain, following a wave of memecoins that surged over 150% within a week. Despite SOL’s price rising 3% in the same period, BNB’s impressive 28% rally has impacted sentiment within the Solana ecosystem.
Rising inflows to SOL ETPs signal increasing institutional demand
Data from SOL perpetual futures offers insights into traders’ confidence following the unsuccessful attempt to surpass the $250 mark on Sept. 18. Many SOL holders are likely feeling frustration, particularly as competing tokens have reached new all-time highs, such as BNB at $1,357 on Tuesday and Mantle (MNT) at $2.81 on Wednesday.
The funding rate for SOL perpetual futures has stayed below the 6% neutral mark, indicating weak demand for leveraged bullish positions. This cautious trader sentiment may be influenced by the rising popularity of competing blockchains, which have diverted attention from Solana, despite significant weekly inflows into its exchange-traded products.
According to CoinShares reported that Solana ETFs and ETPs garnered $706 million in inflows during the week ending Sept. 5, significantly outpacing XRP’s $219 million. Investors are now expecting approval from the US Securities and Exchange Commission for several spot Solana ETFs on Friday, a development that may lead to additional institutional inflows and could push SOL’s price past $300.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
