Solana price hits a 2023 high, but do strong fundamentals back the SOL rally?
Solana (SOL) price briefly surged to a new year-to-date peak on June 14 after Ripple’s partial win against the U.S. Securities Exchange and Commission in the case contesting XRP’s position as a security.
The token recorded gains of 48.09%, reaching a peak of $32.40 as news of the court ruling spread, before retracing below the $30.00 level.
The positive gains following the verdict not only eliminated the losses from June 2023 when the SEC considered SOL a security in its lawsuit against Binance and Coinbase, but also reclaimed levels not seen since the FTX collapse in November 2022.
However, the network's usage and market charts suggest that a long-term bullish price trend is unlikely, with the $30 level forming a crucial resistance level.
The total fees paid on Solana are still ranging below Q3 2022 levels, per Token Terminal data, referring to a time before the FTX collapse, suggesting that the network’s activity has failed to revive completely.
The blockchain’s ecosystem had close ties to Sam Bankman-Fried, the infamous founder of FTX exchange and multiple projects in the ecosystem secured investment from Alameda Research. Hence, its ecosystem suffered severely after the FTX collapse.
Solana’s active user data paints a similar picture with active addresses trending near yearly low levels.
The project continues to show signs of difficulty in securing a product market fit in DeFi despite the traders’ early optimism in it. The total deposits on Solana, representing its DeFi liquidity, is $317 million, down 97% from its peak of over $10 billion in November 2021.
Nevertheless, the NFT ecosystem on Solana has thrived as it maintained the third position in monthly NFT trading volume since June 15.
Its trading volumes witnessed a
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