FameEX Hot Topics | Glassnode: Capital Inflows Fuel Solana’s Recovery

Over the past two years, Solana (SOL) has demonstrated remarkable growth, with a reported price increase of 2,143%, according to a detailed analysis by Glassnode researchers Ukuria OC and Cryptovizart.

The Glassnode report evaluates Solana’s recovery, competitive performance against major cryptocurrencies, and the primary factors fueling its rise. Since its November 2022 cycle low, Solana has consistently outperformed Bitcoin (BTC) and Ethereum (ETH), driven by substantial capital inflows. The analysis highlights that net liquidity increased by $55 billion during this period, significantly contributing to the asset’s price appreciation. After hitting a low of $9.64, Solana staged an impressive comeback, achieving a 2,143% surge over the past two years.

Glassnode’s data further illustrates Solana’s dominance, outperforming Bitcoin and Ethereum on 344 out of 727 trading days since the FTX collapse. This performance underscores the substantial demand and growth potential for the asset. Capital flows have played a crucial role in Solana’s resurgence, with metrics like Net Realized Profit/Loss and Hot Realized Cap indicating consistent attraction of new investor capital. Notably, capital inflows into Solana surpassed those of Ethereum for the first time just before the start of 2024, reinforcing its market stability and expansion prospects.

The report highlights that significant capital inflows have allowed Solana to accumulate over $55 billion in USD liquidity, pushing its Realized Cap from $22 billion to $77 billion. Glassnode’s findings show that coins held by short-term investors and those aged 6 to 12 months account for more than 50% of sell-side pressure. This balanced profit distribution reflects growing confidence among a diverse investor base, supporting sustained market growth.

Using the Market Value to Realized Value (MVRV) ratio, Glassnode’s analysis suggests Solana’s market remains heated but not at excessive levels. Positioned between the mean and +0.5 standard deviation band, the asset shows potential for continued growth before reaching an overheated phase that might lead to widespread profit-taking. These metrics highlight Solana’s resilience and its capacity for further gains as investor confidence continues to rise.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.