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Solana Hits $1.5 Billion in Stablecoin Inflows as SOL Price Rises 246%

source-logo  beincrypto.com 05 June 2024 19:29, UTC

Solana has experienced a significant surge in stablecoin inflows, amounting to billions over the past six months. During this period, SOL price has soared by nearly 250%.

The total stablecoin market capitalization currently stands at $161 billion, approximately 14% from the $188 billion all-time high recorded in April 2022. Analysts suggest the Layer-1 token could see even greater gains if the stablecoin market capitalization returns to its peak.

Solana Stablecoin Inflows Drive SOL Price Rally

The volume of stablecoin inflows into the Solana network has reached $1.5 billion since December 2023, DefiLlama data shows. During this period, the SOL price is up 246% to $173 at the time of writing. The current value of stablecoins on Solana is $3.04 billion, while the total value locked (TVL) sits at $4.92 billion.

Stablecoin inflows and the rise in Solana’s price are closely connected. Higher liquidity makes it easier to trade SOL tokens, leading to more trading activity and investment.

As a result, demand for SOL tokens increases, pushing the price higher. This growing interest and investment further boost confidence in the Solana network, attracting more developers, projects, and users.

Also Read: What Is a Stablecoin? A Beginner’s Guide

Solana Stablecoin Inflows: Source: DefiLlama

The crypto community shares this positive outlook on Solana. Many believe that the continued inflow of stablecoins will further strengthen the network’s liquidity and trading volume.

Stablecoin market capitalization peaked at $188 billion in April 2022. Currently, DefiLlama reports it at $160 billion. According to pseudonymous blockchain researcher Gumshoe, closing this $28 billion gap could lead to a 102% increase in SOL’s price from its current level of $173.

“When stablecoin market cap goes back to ATHs, SOL will be at a $350 minimum”, said Gumshoe.

Also Read: How to Buy Solana (SOL) and Everything You Need To Know

Moreover, a recent CoinShares report highlights up to $5.8 million in weekly inflows into Solana-based instruments. Significant investments from large financial entities indicate institutional interest and confidence in the asset’s potential.

SOL Price Outlook

Solana price is trading with a bullish bias, holding within the confines of an ascending parallel channel. It faces immediate resistance due to the mean threshold of $177.24. This is the midline of the supply zone, extending from $167.78 to $187.01.

A decisive candlestick close above this roadblock would see SOL price extend the gains to the next resistance order block between $194.12 and $202.47. Breaching its midline at $198.28 would set the tone for an extended move north. SOL could then go as high as to reclaim the $210.18 peak of the March 19 trading session.

Momentum indicators show that SOL bulls are primed for more buying momentum. This is seen with the Relative Strength Index (RSI) crossover above its signal line (yellow band). The Moving Average Convergence Divergence (MACD) is also at the cusp of crossing above its signal line (orange band). These crossovers suggest growing bullish sentiment and a stronger likelihood of positive price movement.

Also Read: Solana (SOL) Price Prediction 2024/2025/2030

SOL/USDT 1D Chart: Source: TradingView

On the flip side, a rejection from the channel’s center line and a slip below the immediate support of $162.75 could trigger panic selling. Nevertheless, the bullish outlook for SOL would only be invalidated once the Solana price closes below $126.88 in the one-day timeframe.