Solana (SOL) token rose 8% as investors turned to riskier assets ahead of Jerome Powell's remarks

Solana's native token, SOL (SOL), rose 8% on March 19 as investors turned to riskier assets ahead of US Federal Reserve Chair Jerome Powell's remarks.

Solana's native token, SOL (SOL), saw a 7.8% surge on Monday, reaching a high of $150.28 by 08:15 ET (12:15 GMT). This rise came ahead of US Federal Reserve Chair Jerome Powell's remarks, which are expected to keep interest rates unchanged but offer a softer inflation outlook for 2025.

The cryptocurrency market mirrored intraday movements in the US stock market, suggesting SOL's gains were not driven by industry-specific news, such as reports that the US Securities and Exchange Commission may drop its lawsuit against Ripple after clinging to it for four years.

Russell 2000 small-cap index futures (left) vs. SOL/USD (right). Source: TradingView / Cointelegraph

At the same time, futures tied to the Russell 2000 small-cap index soared to their highest level in twelve days.

Solana stands out as DApp activity slows down

On Monday, onchain data showed a 47% drop in Solana's onchain volumes over two weeks. However, similar declines were seen across Ethereum, Arbitrum, Tron, and Avalanche, highlighting broader industry trends.

Solana network's total value locked (TVL), a measure of deposits, hit its highest level since July 2022, further supporting SOL's bullish momentum.

Solana total value locked (TVL), SOL. Source: DefiLlama

By March 17, Solana's TVL reached 53.2 million SOL, showcasing a 10% increase from the previous month. In comparison, BNB Chain's TVL rose 6% in BNB terms, while Tron's deposits fell 8% in TRX terms over the same period. Despite weaker activity in decentralized applications (DApps), Solana continued to attract a steady flow of deposits, highlighting its resilience.

Solana saw strong momentum, driven by Bybit Staking, which surged 51% in deposits since Feb. 17, and Drift, a perpetual trading platform, with a 36% TVL increase. Restaking app Fragmentic also recorded a 65% rise in SOL deposits over 30 days. In nominal terms, Solana secured its second-place position in TVL at $6.8 billion, outperforming BNB Chain's $5.4 billion.

Despite the market downturn, several Solana DApps remain among the top 10 in fees, outperforming larger competitors like Uniswap and Ethereum's leading staking solutions.

Ranking by 7-day fees, USD. Source: DefiLlama

Solana's memecoin launchpad Pump.fun, decentralized exchange Jupiter, automated market maker and liquidity provider Meteora, and staking platform Jito are among the leaders in fees. More notably, Solana's weekly base layer fees have surpassed Ethereum's, which holds the top position with $53.3 billion in TVL.

SOL derivatives hold steady as token unlock fears subside

While SOL price slid 27% over 30 days, derivatives demand remained balanced between longs (buyers) and shorts (sellers), as evident in the futures funding rate.

SOL futures 8-hour funding rate. Source: CoinGlass

Periods of high demand for bearish bets typically pushed the 8-hour perpetual futures funding rate to -0.02%, which equals 1.8% per month. When the rate turns negative, shorts are the ones paying to maintain their positions. The opposite occurs when traders are optimistic about SOL's price, causing the funding rate to rise above 0.02%.

The recent price weakness was not enough to instill confidence in bears, at least not to the extent of adding leveraged positions. One reason for this can be explained by the reduced growth in SOL supply going forward, similar to inflation. A total of 2.72 million SOL will be unlocked in April, but only 0.79 million are expected for May and June.

Ultimately, SOL is well-positioned to reclaim the $170 level last seen on March 3, given the resilience in deposits, the lack of leverage demand from bears, and the reduced supply increase in the coming months.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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