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- Glassnode notes that most of the increased activity appears to be bot-driven, raising questions about the authenticity of Solana’s growth.
- Solana’s price remains strong, holding at around $240, with traders predicting further gains.
Solana’s on-chain activity has skyrocketed to new highs as the SOL price continues to hold around the $240 level. Market intelligence firm Glassnode recently stated that the Solana blockchain network experienced record-high on-chain transfer volumes.
What’s Behind Solana’s Skyrocketing Transfer Volume?
In a post on the X platform on Tuesday, November 19, Glassnode noted that Solana’s transfer volume touched an all-time high of $318 billion on November 16. Interestingly, this figure is almost three times Solana’s current market capitalization of $112.5 billion. In addition, the total number of active addresses on Solana also jumped to 22 million.
However, it turns out that most of this activity was caused by bots. However, the on-chain analytics firm observed a drop in both average and median transaction volumes around the same time. such developments raise doubts about Solana’s metrics as organic growth usually reflects a corresponding increase in averages. While explaining this whole scenario, Glassnode said:
This pattern of network activity inflation may be indicative of bot-driven activity, which has historically contributed to similar trends in Solana.
This increased activity is largely responsible for the sharp spike in Solana’s network costs and revenues, according to the CNF report. On Wednesday, November 20, daily revenue for the blockchain also hit a record high of $6 million with network participants paying $7.3 million in transaction fees, according to DeFiLlama.
On November 19, the layer-1 network reached a record-high decentralized exchange (DEX) volume of $6.93 billion, with Raydium accounting for 74% of Solana’s DEX trading volume of $5.13 billion, according to DeFiLlama data.
The increased activity has led some critics to question the network’s growth metrics. Claims of wash trading in meme tokens and other suspicious practices have fueled skepticism regarding Solana’s reported performance in recent months.
Solana Price Outlook
However, Solana price is still showing significant bullish activity from investors despite all the concerns voiced. Pseudonymous Trader Titan’s analyst Crypto predicts SOL’s native tokens will reach $400, saying that they may break out of this cup and handle pattern. Veteran trader Peter Brandt considers the upward push as part of a broader swing in the market and put up a short-term target of $275.
Often times price moves in swings whereby the swings are relatively equal in price. I am sure Elliott traders get quite precise (as they tend to do ) but I just use swing targets as a guide pic.twitter.com/QBGzOAZTHi
— The Factor Report (@PeterLBrandt) November 18, 2024
Solana’s price has risen rapidly in recent weeks. In the previous week, the SOL value rose by 14%, and in the past month, it surged by almost 45%, CNF reports. On November 18, its market capitalization reached a peak of $117.8 billion, cementing SOL’s position as the fourth largest crypto asset.
