After an impressive 120% rise in December, Solana‘s (SOL) price began to decline post-Christmas, yet its market value surpassed that of Binance’s BNB token, catching the crypto community’s attention. The question arises: what factors have propelled Solana to the forefront and attracted investor interest? Let’s delve into the details.
SOL experienced selling pressure that caused its price to drop below $100 before stabilizing just above $101. At the time of writing, SOL was trading over $106, approximately 11% below its annual high of $123 seen on December 26th. Meanwhile, BNB saw a 9% increase, regaining its position as the fourth-largest cryptocurrency by market value, trading around $319 and just ahead of Solana.
The rally on the Solana front was ignited by incredible surges in Solana-based memecoin projects. Between November 22nd and December 22nd, BONK’s price rose by 650%, while Dogwifhat (WIF) saw an astonishing 123,000% increase, capturing widespread attention.
However, after reaching all-time highs, both memecoin projects retracted by more than 50%, starting their decline three days before Solana hit its annual peak on December 26th.
In parallel with the price surge, trading activities within the Solana ecosystem increased, with SOL-based decentralized exchanges (DEXs) surpassing Ethereum‘s trading volumes for the first time. However, according to blockchain data analytics platform DefiLlama, Solana’s DEX volume has since retracted, dropping to $1.1 billion in the last 24 hours, while Ethereum’s DEX volume reached $2 billion.
These developments have also seen Ethereum recently gain 5% weekly, leading many investors and analysts to speculate that Ethereum may soon outperform its rivals.
