Solana price recovers from sharp sell-off, is $300 SOL possible?

[cryptoconnect]

Solana’s native token, SOL, currently priced at $242.96, has surged by 8% since dropping to $222 on November 26. Despite this recovery, some investors remain cautious, pointing to the sharp correction from Solana’s all-time high of $263.80 on November 23. This decline has raised concerns that the bull run may be losing momentum.

However, on-chain and derivatives data suggest that SOL still holds significant upside potential. With the right market conditions, Solana price could continue to build on its recent gains and potentially target new highs soon.

Investor frustration has been mounting for Solana (SOL) after a modest 1% gain between November 20 and November 27, especially when compared to the broader altcoin market, which saw a 12% climb during the same period. Several tokens outperformed significantly, with XLM, TIA, FTM, UNI, and DOT posting gains of 40% or more.

While it’s difficult to pinpoint the exact cause of the shifting sentiment, SOL holders should remain focused on Solana’s solidifying fundamentals. The network has positioned itself as the second-largest programmable blockchain in terms of developer activity and user engagement. Additionally, Solana’s total value locked (TVL) rose by 48% in the 30 days leading up to November 27, showcasing continued growth.

Deposits on the BNB Chain increased 14% over the same 30-day period, while Tron network’s total value locked (TVL) grew by 13%. Solana’s standout metrics include the Jito liquid staking solution at $3.4 billion (+44%), the Jupiter decentralized exchange at $2.4 billion (+50%), and Raydium at $2.2 billion (+58%). This surge in deposits reflects the growing demand for SOL, driven by its expanding decentralized application (DApp) ecosystem.

Solana and Ethereum: Thriving in Separate Niches

While some analysts suggest that Solana (SOL) price competes directly with Ethereum (ETH), data reveals that both networks can grow independently, serving different market needs. On Ethereum, on-chain activity has surged by 47% in the last 30 days, according to DappRadar. During this period, Uniswap volumes grew by 62%, and CoW Swap saw a 71% increase, highlighting Ethereum’s continued dominance in decentralized finance (DeFi).

On the other hand, Solana has emerged as a leader in the meme coin space, with notable growth in meme coin launches and trading. Three of the top five highest-grossing decentralized apps (DApps) belong to Solana — Raydium, Jito, and Pump. fun — outperforming Ethereum’s leaders like Lido, Uniswap, and Aave in terms of revenue.

While both networks thrive in different niches, their independent growth means they do not directly compete for the same user base. However, Solana’s reliance on meme coins introduces more risk. The speculative nature of tokens like ****, POPCAT, MEW, and SPX6900, which saw massive surges of over 100% in three months, could prove unsustainable in the long run.

To assess if sentiment has shifted on SOL after its 10% decline from Nov. 23 to Nov. 27, the futures premium is key. In stable markets, monthly futures usually trade 5% to 10% above spot prices to account for the settlement delay. This premium can offer insight into trader sentiment and potential price movements.

SOL price futures show a 23% annualized premium, the highest in seven months, indicating optimism. However, excessive bullishness can push this above 40%, increasing the risk of liquidations during corrections. Despite this, Solana’s on-chain activity and market data suggest further price growth. With a $113.7 billion market cap, SOL trades at a 73% discount compared to Ethereum’s $429.4 billion, leaving room for potential upside.