Solana traders chase $180 target after SOL gains 13% in 2-days

The Solana SOL token rose 13% between July 14 and July 16, breaking above the $160 level for the first time in five weeks. However, SOL is still 24% below its peak of $209 in March, leaving little room for bulls to cheer. Traders are questioning the sustainability of the uptrend and the chances of re-reaching $180 soon.

Solana memecoin frenzy and Ether ETF momentum

The recent frenzy around SOL (currently at $162) may be due in part to the final registration stage of Ether-traded funds (ETFs). According to Bloomberg analyst Eric Balchunas, the US Securities and Exchange Commission (SEC) is understood to have issued final guidance to asset managers as they prepare for the July 23 launch. VanEck and 21Shares filed a similar bid for the Solana ETF on July 8, although a final decision from the SEC is not expected until March 2025.

The Solana ecosystem is largely made up of memcoins due to their low launch and trading fees. This contributed to the proliferation of memecoins such as BONK and Dogwifhat (WIF), which reached peak market capitalizations of $2.8 billion and $4.8 billion, respectively. More importantly, Solana was able to build an active and engaged community that is not easy to fully replicate.

Solana is currently the second-largest blockchain by decentralized exchange (DEX) volume and is closing the gap with the market leader.

The average transaction fee on Ethereum is $2.3, which creates unfair competition, but the level of popularity of Solana DEX stands out even compared to Arbitrum and BNB Chain, which have extremely low costs for such transactions. It is also worth noting that Base, the second layer of Ethereum, which also became famous after the launch of memecoins and tokens, is experiencing a downward trend in volumes. After peaking at 10.8% weekly market share on June 8, Base has dropped to 3.6%, according to DefiLlama.

Solana TVL Growth and SOL Premium Futures Markets

Solana's increase in asset count is also reflected in its total value locked (TVL), which is outperforming BNB Chain. An increase in the deposit base is generally considered a bullish factor, as it increases the security of the network helps generate positive feedback, attracts more users and developers, and increases the value of the token and the growth potential.

Some of Solana's biggest successes include Jito, a liquid staking solution that saw its TVL increase by 14% in 30 days, and Kamino, a lending and fundraising solution that grew its deposit volume by 12% over the same period. Finally, Jupiter Perpetual, a DEX aggregator, has increased its TVL by 28% in the last 30 days. In comparison, the leading DApps on the BNB network - PancakeSwap and Venus - experienced a 7% and 5% drop in TVL respectively over the same period.

Finally, the SOL futures markets should be analyzed. The SOL futures premium reflects the difference between monthly contract derivative and conventional exchange spot prices. As a rule, the premium (basis) is from 5% to 10% per annum to compensate for the duration of settlements. Essentially, a premium increase indicates that traders are willing to pay more for future contracts, indicating bullish sentiment.

The premium to SOL futures is now 12%, which has been common over the past few days. This indicates a cautiously optimistic mood among traders, which is especially relevant since SOL is up 25.7% over the past eleven days. Given the activity of the Solana network and derivatives performance, SOL has everything it needs to continue its rise to $180.