Solana (SOL) Eyes ATH Amid Surging DEX Volume: What’s Next?

Solana (SOL) has rallied above $240 over the weekend—its highest level since late 2021—and is only around 6% away from its record high of approximately $260 set in November 2021 during the cryptocurrency bullrun.

The third-largest cryptocurrency by market cap may be next to establish a new all-time high after Bitcoin. The cryptocurrency was trading at around $242 at press time, recording a 15% weekly growth, CoinGecko data shows.

The entire market is up, with SOL taking a leading position in the rally. I could go much higher in 2025.

Solana’s price increases come amid an uptick in trading volumes across Solana-based decentralized exchanges (DEXs). Data from DeFi Llama shows that monthly DEX volumes have surpassed $70 billion for the first time.

Another Big Rally

In comparison, Solana’s DEX trading volumes have doubled Ethereum’s, with platforms like Raydium and Orca leading the charge. Ethereum’s DEX trading volumes saw around $33.4 billion over the same period.
Trading activities have been on the rise since November 10, peaking at $6.88 billion on November 12. In the last two days, the DEX trading volumes maintained at above $6 billion.

The key driving force behind the surge is the popularity of Solana-launched meme tokens as PumpFun, the prominent meme coin launchpad, has gained traction, which automatically provides liquidity to Solana’s leading DEX Raydium. As more users flock to the platforms to trade meme tokens, its trading activity increases.

A number of PumpFun-created meme tokens, including Peanut the Squirrel (PNUT) and Litecoin Mascot (LESTER), are leading Raydium’s 24-hour trading volumes. PNUT ranks fourth and LESTER ranks fifth with trading volumes sitting at around $49.4 million and $45.9 million, respectively.

As Solana’s value moves higher, most Solana-based meme coins skyrocket. In the last seven days, Act I The AI Prophecy (ACT) skyrocketed over 2,800%, PNUT spiked over 1,300%, Bonk (BONK) recorded a 95% weekly growth, and Moo Deng (MOODENG) jumped 50%, to name a few.

Ethereum remains a dominant player in the DEX space. However, Solana’s DEXs are gaining ground due to lower fees, faster transaction times, and especially rise of meme tokens on Solana.

Solana’s market cap is sitting at around $115,350, still behind Ethereum’s with a market value of $376,012, data shows. As the market rises, these figures are likely to continue up.

Renewed Institutional Interest in Solana Ecosystem

A recent report from Messari showed renewed interest in the Solana ecosystem. Solana’s DApps attracted $173 million in Q3 2024, up 54% from the previous quarter and also marking the highest investment level since Q2 2022.

Yet, Solana’s institutional adoption remains slow compared to Ethereum, according to a September report from VanEck. Institutional investors still prefer Ethereum due to its first-mover aspect.

Solana, while gaining traction for its high throughput and low transaction costs, still faces challenges in building a comparable level of trust and utility among large-scale investors.

Analysts, however, think there’s plenty of room for Solana’s valuation growth, projecting it to reach half of Ethereum’s market value, particularly with a potential approval of spot Solana ETFs. It could hit $1000 in 2025, assuming the market continues higher.

“Based on third party research, Solana has the potential to reach 50% of Ethereum’s market cap, with predictions placing SOL at a price of USD 330,” VanEck’s report wrote.

Following the launch of several US spot Bitcoin and Ethereum ETFs, asset managers are betting on a chance of Solana ETFs being approved under Trump’s administration. As of November, 2024, VanEck, 21Shares, and Canary Capital, are seeking approval from the SEC to launch their respective Solana ETFs

The applications are currently under review by the Commission. Analysts expect a more open approach to cryptocurrency regulations under the new administration could pave the way for the launch of spot Solana ETFs in the U.S., which potentially increases Solana’s institutional adoption.