Solana in May 2024: SOL Price and TVL Surged, What’s Next?
In this report, we explore Solana’s ecosystem surge and the SOL price action in May 2024. What are the reasons for its rise, and what lies ahead for Solana?
Key takeaways:
Solana is an open-source blockchain platform founded in 2017, emphasizing scalability and speed. With its unique Layer 1 network architecture, it processes over 710,000 transactions per second, enabling the creation of smart contracts and decentralized applications (DApps) for various use cases, such as decentralized finance (DeFi) and nonfungible tokens (NFTs) marketplaces. Unlike Ethereum, Solana does not require additional scaling solutions, relying on powerful computers for network maintenance and data storage. Its native cryptocurrency, SOL, is essential for transactions and network security through staking.
Solana’s native token, SOL, experienced a 53% increase in May, trading up from $122,7 on May 1 to $188 on May 21. However, SOL failed to break through the $190 mark and fell to $166 on May 31.
SOL/USD price index. Source: TradingView
Some analysts believe that SOL’s recent price adjustment is a response to a decline caused by the approval of an Ether ( ETH ) exchange-traded fund (ETF) in the U.S. The SEC’s approval on May 23 pushed ETH to $3,975 on May 27, just shy of its $4,090 peak in 2024. However, it remains uncertain how much of SOL’s decline to $161 on May 26 was triggered by speculation around Ether’s ETF approval.
The price decline comes alongside a 40% drop in Solana’s open interest (OI) over the past 30 days, down to $1.78 billion on May 9, according to CoinGlass data, which typically signals that traders are uncertain about the cryptocurrency and are not confident in taking positions on the asset’s price. But after that, it
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