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Condition of Solana (SOL) Today
Bittime - According to the Bittime Market, the price of Solana (SOL) has decreased by -2.90% so it is at IDR 1,596,894 at the time this article was written (23 - February 2024).
source: market Bittime.com
The steady decline in SOL prices may have investors worried that peak demand has passed for SOL as the airdrop frenzy dies down. Based on Solana network activity compared to competing blockchains, the outlook supports bearish momentum.
Weak performance of Solana SPL tokens in line with decline in network activity Part of the SOL price correction can be attributed to the negative performance of Solana SPL tokens, including Jito (JTO), Jupiter (JUP), and Dogwifhat (WIF), each down 17%, 16%, and 18% since February 19. As a result, investors anticipating profits from a potential airdrop are negatively affected because futures offerings are often priced based on existing alternatives.
Also read: Free Jupiter Airdrop (JUP): Latest Mechanism and Guide
Not Just Rely on Airdrops
Demand for SOL does not depend solely on airdrops as there are dozens of decentralized applications (DApps) already running on the network. For example, decentralized exchange Raydium had 172,440 active addresses in just the last week. Similarly, NFT marketplace Magic Eden attracted 167,930 addresses in the same period.
However, when analyzing Solana network activity versus competing chains, Solana's recent performance has been less than optimal.
In the week leading up to February 21, Solana network DAps volume reached $813 million, significantly lower than Polygon's $2.9 billion and BNB Chain's $5.2 billion. In fact, Solana was the only blockchain in the top 7 that failed to show volume growth in that period. Additionally, the number of active addresses on Solana grew 5%, while competitors Ethereum and BNB Chain recorded increases of 14% and 27% respectively.
The amount of SOL deposited into the network's DApps, measured by total value locked (TVL), rose to 37.7 million on February 17, the highest level since November 2022. More importantly, the current 36.3 million SOL in TVL represents an increase of 13, 5% versus the previous month, indicating that overall demand for SOL has increased, despite airdrop expectations.
Staking Solana
Additionally, the portion of SOL staked in the original validation process reached 67.3% on February 21, according to StakingRewards. Typically, an increase in TVL and deposit rate indicates less short-term selling pressure, meaning holders are not affected despite the latest price correction.
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Solana partners with Filecoin, but Ethereum remains the leader in DApps Another source of optimism for Solana investors comes from its integration with Filecoin FIL$8.20, a decentralized storage solution. This collaboration solves the persistent problem of historical data availability, as complete records exceed 250 terabytes of storage. Previous solutions used Google Cloud's BigQuery platform, which did not align with the values of some DApps users and developers.
More broadly, it is increasingly difficult to justify Solana's $44.6 billion market cap considering the network lags behind Polygon and Arbitrum in active users and volume. By comparison, Polygon's market cap is $8.8 billion, while Arbitrum's is just $2.3 billion.
The data does not necessarily indicate a further SOL price correction but creates little incentive for bulls to maintain levels above $100.
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