Over the past 4 years, solana (SOL) has captured the attention of retail and institutional investors due to its performance.
The crypto asset created by the Ukrainian Anatoly Yakovenko seeks to stand out in the niche of networks specialized in smart contractsuntil now dominated by Ethereum.
Glassnode, a data analytics firm on-chainanalyzed the historical behavior of the cryptocurrency, highlighting its recovery after the fall of the FTX exchange, as well as its possible growth margin in the current cycle.
The 2021 bull market propelled solana to all-time highs before facing the decline associated with the FTX collapse. This exchange went from being the third largest on the planet to declaring bankruptcyin less than a week, in the year 2022.
This event generated excess supply and took the price of SOL to lows of $9.64. However, since then, solana experienced a 2,143% recovery, surpassing bitcoin (BTC) and ether (ETH), Ethereum’s cryptocurrency in percentage price increase.
Solana outperformed both crypto assets in 344 of the 727 trading days since the FTX eventwhich “demonstrates substantial growth and demand for the asset,” Glassnode maintains. This can be seen in the following graph.
Solana capital inflow
The flow of capital to Solana has been significant. According to Glassnode, the Hot Realized Cap metric, which measures capital inflow from new investors, indicates that Demand for the cryptocurrency has surpassed that of ETH for the first time. As seen in the following graph.
“Solana has consistently maintained a positive net capital inflow, with only minor outflows during this period,” the firm says.
This change was consolidated towards the end of 2023, highlighting the interest in the asset compared to its main competitor.
Since September 2023, solana has maintained positive net capital income. During this period, managed to attract up to $776 million in new capital per dayas seen in the following graph.
This constant flow has contributed to the rise in its price and a net increase in liquidity estimated at $55 billion, according to Glassnode.
On the other hand, the relationship between the current price of SOL and its Average Realized Market Value (MVRV) shows that the market has not yet reached extreme overheating levels, as seen in the following graph.
This is a metric used to evaluate whether the price of an asset is overvalued or undervalued in relation to its historical value.
«SOL price is consolidating between the mean and the +0.5 standard deviation range. This indicates that the market is relatively active,” explains Glassnode.
This suggests a Additional potential for asset appreciation before investors take massive profits.
ETFs are a bullish catalyst
The possibility of ETFs being approved in the United States, based on solana could also be a key catalyst for its growth in the market.
These funds would require companies to purchase and hold SOL in their reserves, creating tangible demand in the market. This dynamic could reduce the available supply, favoring upward pressure on the price..
With a regulatory environment looking promising under the incoming Donald Trump administration, solana’s prospects are strengthening. The appointment of pro-cryptocurrency officials could facilitate the approval of these financial instruments and reinforce interest in digital assets like SOL, as reported by NoticiasVE.
Solana’s growth, both in adoption and price, marks a trend that could redefine its position in the cryptocurrency ecosystem, as investors continue to evaluate its role in the global market.