Solana Surged 2,000% In 2 Years, But It Could Go Even Higher: Report

Solana‘s SOL/USD growth over the past two years, marked by a staggering 2,143% price increase, is rooted in a substantial $55 billion influx of new capital, according to a recent analysis by Glassnode.

The report, released earlier in the week, delves into the network's underlying dynamics, revealing robust investor demand that, despite profit-taking, hasn’t reached levels traditionally associated with market tops.

Solana's journey from a low of $9.64 following the FTX collapse to its current position as a major crypto contender is a story of notable recovery.

The Glassnode report highlights this outperformance, noting that Solana has not only eclipsed Bitcoin BTC/USD and Ethereum ETH/USD in price appreciation but has also consistently attracted more capital, capturing significant market attention.

This surge is not merely speculative; it’s backed by a tangible shift in investor preference.

The analysis reveals a critical detail: new capital flowing into Solana is outpacing that of Ethereum for the first time.

This is measured by the “Hot Realized Cap,” which tracks capital held by newly active addresses.

The data underscores a growing appetite for Solana, particularly among new market entrants, a factor that propelled the asset’s growth at the start of 2024.

This surge in capital inflow shows the network’s appeal.

Glassnode’s report goes on to track the on-chain capital flow, revealing a consistent net positive inflow into Solana since September 2023.

This consistent liquidity injection has been the backbone of Solana's price appreciation, with daily inflows peaking at $776 million.

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This indicates a healthy demand-side dynamic essential for sustaining growth.

The analysis also addresses the natural phenomenon of profit-taking that occurs during bull markets.

Glassnode's breakdown shows a balanced distribution of profit taking across different investor cohorts, from short-term holders to those holding for longer periods of 6-12 months.

This highlights the broad appeal of Solana as an investment for different types of market participants.

As a result of these inflows, Solana has seen its Realized Cap rise from $22B to $77B.

Despite the rapid price increase, the report posits that the market isn’t overheated.

Using the MVRV ratio as a benchmark, the analysis notes that current investor profitability is within reasonable bounds, not yet reaching the extreme levels historically seen at market tops.

This suggests that there is potential for further upward movement before the market becomes overextended.

Glassnode’s report portrays a market driven by solid capital inflows and a broad base of investors.

Solana’s recovery is not just a story of price action, but also one of substantial liquidity and expanding adoption.

While vigilance is needed, the current data suggests a sustainable growth trajectory, not an imminent bubble.

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