Solana Network Thrives, But SOL Price Struggles to Reclaim $100

10 months ago 3

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Solana’s SOL price experienced a notable setback during the first week of the new year, sliding by 10% to under $100. This decline marked a significant retracement from its recent peak of $115 on January 2.

Still, its ecosystem continues to thrive, witnessing a surge in transaction volume and a growing stablecoin dominance.

SOL’s Price Cools Down

Last year, Solana stood out as one of the top-performing cryptocurrency, exhibiting a staggering surge of nearly 1,000%. While most of this growth occurred during the latter part of the year, it coincided with a resurgence in Solana’s DeFi sector and increased network activity.

Several observers had anticipated this positive trend to extend into the new year, supported by early indicators. As of December 31, SOL was trading at $103 and quickly ascended to $115 by January 2. However, the altcoin’s price experienced a correction on January 3, triggered by a report that the US SEC might reject all pending spot Bitcoin ETF applications.

Since then, the price decline has persisted, with SOL value dropping as low as $92 earlier today. Solana has since recovered to $95.35 as of press time.

It is worth noting that the downturn aligns with the broader decline across various top cryptocurrencies, including Ethereum, XRP, and Cardano. These digital asset prices have fallen by 3%, 9%, and 14%, respectively.

The Solana Network Thrives

Despite SOL’s volatile price performance, the Solana network is witnessing heightened activity. The daily transaction volume on Solana surged to more than $40 billion, the network’s highest transaction volume since October 2022.

“Solana’s daily transaction volume hits a new high of over $40 billion – the highest since October 2022! Economic activity for SPL standard tokens is also at a peak, unseen since late 2022,” IATH Studio pointed out.

This surge in Solana’s transaction volume primarily stems from meme coin trading. Notably, Solana-based meme coins, like BONK and WIF, have enjoyed interest from the crypto community thanks to their impressive price performance.

Data from Artemis further shows that Solana is emerging as a dominant force for stablecoin transactions due to its cheaper fees. As of January 1, Solana-based USDC transfer volume surpassed that of USDT on the TRON blockchain by more than 40 billion.