On October 2024, Solana’s ecosystem achieved a record breaking $52.157 billion in DEX trading volume, topping Ethereum. During this rise however, whale accounts are cashing out, including a recent $15M Pump.fun, could smart money’s caution signal a shift?
Whales Offload $15M in SOL, Raising Concerns Over Market Impact
Recent big sell-offs by big whales holding Solana has brought up fears of Solana’s price being hammered down. The Pump.fun Fee Account recently sold 90,000 tokens worth $15 million, contributing to a cumulative sale of 635,843 SOL at an average price of $159 per token.
Such sell-offs can result in supply piling in the market. However, if demand doesn’t stay up with such sell-offs, it can easily drive the price down.
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It is important to monitor the activities of the large holders, as even their transactions can have a large impact on market movement. As such entities continue to sell off Solana, that could signify a bearish trend in the price.
Solana Surpasses Ethereum in October DEX Volume, Leading by 25.7%
During October 2024, Solana’s decentralized exchange trading volume, $52.157 billion, surpassed Ethereum’s $41.499 billion for the first time. The 25.7% lead over Ethereum marks a significant milestone, as Ethereum has traditionally dominated the DEX landscape.
The shift is a sign of traction of Solana in the space of decentralized finance, which is due to high transaction speed and low cost, incentivizing DEX users.
Its blockchain can support up to 65,000 transactions per second, way beyond what Ethereum can handle now.
With this high scalability, the trading experience has become smoother and faster on Solana-based DEXs. More users and developers are finding themselves drawn to Solana thanks to its cost-effectiveness and speed.
This shift in preference, and the recent Solana DEX volume surge, illustrate the competitive advantage that having a low fee, in addition to low risk of network congestion, brings to Solana.
Solana Ecosystem Funding Surges to $173M in Q3, Highest Since 2022
In the third quarter of 2024, 29 projects in the Solana ecosystem have raised a total of $173 million. The improvement comes on top of double-dip growth of 54% compared to the previous quarter, highlighting a strong rebound in investor confidence.
September alone accounted for $103 million of the total and was the strongest month since June 2022. In stark contrast, compared with early 2023 when funds flowing into Solana projects dropped under $10 million in Q3 2023, this upward trend has been a welcome sight.
The recent influx of capital is a recovery, with each month in Q3 2024 showing sequential growth. It shows a level of momentum in the ecosystem that points to an ecosystem that’s not only rebounding but one that’s also capturing a lot of interest from investors.
The increase in funding is matched by a doubling of Solana’s tokenized treasury market to $123 million in just 30 days. The growth was primarily driven by a $50M influx of USDC from Ethereum.
The existence of such developments reveals that Solana’s financial infrastructure is developing as strongly as possible, and Solana can compete in one of the world’s leading blockchain ecosystems.
Crowd Bullish, Smart Money Signals Bearish Caution
The split of views about the current sentiment of Solana is apparent. Furthermore, smart money sentiment is at -1.47, suggesting more experienced traders, or institutional investors, are more bearish at the friendly crowd sentiment, which is otherwise extraordinarily bullish at 3.02.
This divergence may indicate caution, as smart money sometimes signals market reversals or a downturn, even when retail sentiment remains high.
This sentiment split could reflect recent sell-offs by major Solana holders, which may be causing caution among larger players.
It will now be important to see whether retail optimism, or its lack thereof, can push Solana’s price higher in the medium term, or if smart money’s pessimism will pin prices down in the short term.
