Time for a Solana price rebound? SOL futures are mixed, but onchain looks bullish
2025.02.04 16:46
Solana’s native token, SOL (SOL), staged an impressive 22% rebound after testing the $180 support on Feb. 3. However, despite recovering to $215, SOL remains 27% below its all-time high on Jan. 19. This downturn has weighed on trader sentiment, as indicated by the SOL futures market, where a key sentiment gauge has dropped below the neutral threshold.
SOL 2-month futures annualized premium. Source: Laevitas.ch
Monthly SOL futures contracts typically trade at a premium to spot prices, reflecting the additional risk assumed by sellers due to the extended settlement period. In neutral market conditions, this annualized premium ranges from 5% to 10%. A reading below this threshold suggests weakening demand from long positions (buyers).
SOL futures discount points to skepticism, but historical data challenges accuracy
At first glance, the current futures discount might indicate that professional traders are skeptical of SOL’s bullish momentum. However, historical data suggests that such positioning does not always predict market direction accurately.
In many cases, institutional players—including whales and arbitrage desks—misread trend reversals. When the majority of the market bets on trend continuation, corrections tend to be more pronounced, particularly as market makers adjust their positions.
SOL 3-month futures annualized premium, Oct. 2024. Source: Laevitas.ch
A similar scenario played out in early October 2024, when the SOL futures premium fell to 2% after a 13% price drop over three days to $140. That level proved to be a local bottom, as SOL subsequently surged 58% over the next 40 days, reaching $222. This underscores how derivatives market sentiment is often a lagging indicator rather than serving as a reliable predictor of future trends.
To assess whether SOL is positioned to retest $260 in the near term, investors should examine key network metrics, including usage trends, transaction fees, and potential growth drivers. While some critics argue that the recent memecoin frenzy—exemplified by the Official Trump (TRUMP) token launch on Solana—was unsustainable, other revenue streams such as gaming, social networks, and gambling could provide continued bullish momentum.
Solana DApps 30-day active address. Source: DappRadar
The number of active addresses engaging with the top ten Solana decentralized applications (DApps) increased by 21% month-over-month. By comparison, Base network saw a 27% decline in DApp activity over the same period, while Polygon and Ethereum experienced drops of 17% and 15%, respectively, according to DappRadar data.
Solana’s TVL increased by 5.5%, while competitors faced headwinds
T total deposits in Solana DApps, measured by total value locked (TVL), grew 5.5% over 30 days, closing the gap with Ethereum. Solana’s market share expanded from 6.7% in October 2024 to 9.5% currently, reinforcing its position as the second-largest blockchain by TVL.
Top blockchains ranked by total value locked (TVL), USD. Source: DefiLlama
Key contributors to Solana’s TVL growth include Meteora, which surged 162% in 30 days, Binance Staked SOL, up 23%, and Marinade Finance, which gained 15%. These inflows helped Solana generate $246 million in monthly network fees—far exceeding Ethereum’s $133 million over the same period. Notably, three of the top five most profitable DApps belong to the Solana ecosystem: Jito, Raydium, and Meteora.
Related: Pump.fun hit with suit claiming all memecoins are securities
Attributing SOL’s success solely to memecoin speculation overlooks broader adoption across gaming, staking, liquidity provision, payments, artificial intelligence, algorithmic trading, and token distribution. However, challenges remain as users continue to report failed transactions, highlighting persistent concerns about network reliability.
Scalability issues are not unique to Solana, as maximal extractable value (MEV) practices—where validators prioritize transactions for profit—affect multiple blockchain ecosystems. Still, compared to other DApp-focused blockchains, Solana’s growing adoption strengthens its long-term outlook and provides a strong foundation for further SOL price appreciation.
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.
