Coinbase Buyers Fuel Solana’s SOL Rally

Coinbase Buyers Fuel Solana’s SOL Rally

Solana’s SOL cryptocurrency has experienced a significant rally, with a gain of over 50% in just two weeks. Data shows that buyers from Coinbase, the Nasdaq-listed digital assets exchange, have played a major role in driving the price of SOL higher. The cumulative volume delta (CVD) on Coinbase has seen a notable increase, indicating net capital inflows into SOL. This suggests that institutions may be actively bidding for SOL through Coinbase. The leadership of Coinbase in the SOL market comes after a bullish prediction by VanEck, stating that SOL’s price could reach as high as $3,200 by 2030. However, despite the price gains, on-chain activity for SOL has not seen a corresponding increase. The total value of assets locked in Solana-based DeFi protocols has actually declined, indicating a disconnect between price and usage.

Coinbase Buyers Fuel Solana’s SOL Rally

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Overview of Solana’s recent rally

Solana’s native cryptocurrency, SOL, has experienced a significant rally, gaining over 50% in just two weeks. This surge in price has caught the attention of many investors and analysts, who are trying to understand the factors driving this upward momentum.

Coinbase as a significant source of bullish pressures

According to data tracked by Kaiko, Coinbase has emerged as a significant source of bullish pressures for Solana. Kaiko’s data shows that there has been a net capital inflow on Coinbase, indicating increased buying pressure for SOL. This influx of capital has played a crucial role in driving up the price of the cryptocurrency.

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Explanation of cumulative volume delta (CVD)

To understand the buying and selling pressure in the market, analysts often rely on the cumulative volume delta (CVD) metric. CVD is calculated as the net difference between buying and selling volumes over a specific period. It provides insights into the overall bullish or bearish sentiment in the market.

Comparison of CVD on different exchanges

Analyzing the CVD on different exchanges can help identify the platforms where the majority of buying or selling activity is occurring. In the case of SOL, the CVD on Coinbase has shown a significant increase, indicating a higher proportion of buying volume compared to other exchanges. Binance and Kraken have also exhibited positive CVD, while Upbit has shown negative CVD, indicating a higher proportion of selling volume.

Institutions bidding for SOL through Coinbase

The median order size on Coinbase has been notably larger compared to other exchanges, suggesting possible institutional involvement in purchasing SOL through Coinbase. This indicates that large institutional players are actively bidding for SOL on the Nasdaq-listed exchange.

VanEck’s bullish case scenario for SOL

Institutional asset manager VanEck has published a report outlining a bullish case scenario for SOL. The report suggests that SOL’s price could potentially reach $3,200 by 2030. This prediction is based on the assumption that Solana will become the first blockchain to accommodate applications with over 100 million users.

Impact of SOL’s price gains on on-chain activity

Despite SOL’s impressive price gains, on-chain activity has not shown the same level of enthusiasm. The total value of assets locked in Solana-based decentralized finance (DeFi) protocols has actually declined in the past two weeks. This decline in total value locked (TVL) is a cause for concern, as TVL is often used as a measure of smart contract usage and overall activity on the platform.

Decline in assets locked in Solana-based DeFi protocols

According to data from DefiLlama, the TVL in Solana-based DeFi protocols has dropped from 12.03 million SOL to 10.23 million SOL in just two weeks. This represents the lowest TVL since April 2021. While TVL is not a perfect measure, it does indicate a decline in the usage and activity of smart contracts on Solana.

Increase in volume on Solana-based decentralized exchanges

Although the decline in TVL is concerning, there has been an increase in trading volume on Solana-based decentralized exchanges. However, this increase in volume alone is not sufficient to justify the significant price gains seen in SOL. Analysts are closely monitoring the relationship between price gains and on-chain activity to assess the sustainability of SOL’s rally.

Analyst’s observation on price gains and on-chain activity

On-chain analyst Patrick Scott has observed that SOL’s recent price gains are not fully supported by on-chain activity. This suggests that the current rally may be driven more by speculative buying rather than fundamental factors. Analysts like Scott are closely watching the developments in on-chain activity to determine the sustainability of SOL’s upward momentum.

In conclusion, the recent rally in Solana’s SOL has been primarily fueled by buyers from Coinbase. The increasing CVD on Coinbase, coupled with the larger median order size, suggests significant institutional involvement in purchasing SOL. However, despite the impressive price gains, on-chain activity, as measured by the decline in TVL, has not shown a corresponding increase. Analysts continue to monitor the relationship between price gains and on-chain activity to assess the sustainability of SOL’s rally.

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