Has the price rally of Solana ($SOL) this year been primarily propelled by institutional buying on Coinbase? The smart contract platform has seen an impressive near 300% surge in its value this year, with over 50% of that growth occurring in the last two weeks alone. Analysis suggests that the primary force behind this rally is the buying pressure on Coinbase, the cryptocurrency exchange listed on Nasdaq.
Unraveling the Data Behind the Rally
Reports from Kaiko, initially disclosed by CoinDesk, indicate that the cumulative volume delta (CVD) for SOL on Coinbase has increased by almost $1 million. This signifies a stronger buying than selling activity. Other exchanges like Binance and Kraken also witnessed a positive net flow earlier this week. However, on Upbit, a South Korean exchange, the net flow has been negative for the past two weeks.
CVD is a crucial measure of the net buying and selling volume, offering a comprehensive summary of the market’s bullish or bearish forces. A positive CVD implies dominant buying activity, while negative values indicate the opposite. The recent uptick in SOL’s CVD on Coinbase implies a strong buying interest on the platform.
Indications of Institutional Buying
According to Riyad Carey, an analyst at Kaiko, the average order size for SOL on Coinbase has been higher compared to other exchanges. This suggests that institutional players might be amassing SOL via Coinbase. This buying trend is also reflected in Solana-focused investment products, which have seen a 74.1% increase in assets under management in October, amounting to $140 million, as reported by CCData’s Digital Asset Management Review report.
Solana’s Potential Future
As Coinbase leads the SOL market, institutional asset manager VanEck has proposed a bullish case for the cryptocurrency’s price, predicting it could reach as high as $3,200 by 2030. This forecast is based on the possibility of Solana becoming the first blockchain to host applications with over 100 million users.
Notably, the total value locked on Solana’s decentralized finance (DeFi) protocols has increased from around $200 million at the start of the year to approximately $414 million currently. However, in terms of SOL, data indicates that the total value locked has actually declined from about 12 million SOL to 10.33 million SOL, implying that most of the growth in US dollar terms is due to Solana’s near 300% rise this year.
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