Solana price recovery sparks optimism for $300 target

Solana (CRYPTO:SOL) has rebounded by 8% since reaching $222 on November 26, following a sharp decline from its all-time high of $263.80 on November 23.

Despite the correction, onchain metrics and derivatives data indicate that SOL may still hold the potential to approach its previous highs.

Between November 20 and 27, SOL recorded only a 1% increase, underperforming the broader altcoin market, which grew by 12%.

Other altcoins, such as Stellar (CRYPTO:XLM), Celestia (CRYPTO:TIA), and Polkadot (CRYPTO:DOT), saw gains exceeding 40% during the same period.

However, Solana's fundamentals remain strong, with its total value locked (TVL) rising 48% over the 30 days leading up to November 27.

This TVL growth surpasses that of BNB Chain (14%) and Tron (CRYPTO:TRX) (13%) during the same timeframe.

Notable contributors include the Jito liquid staking solution at $3.4 billion (+44%), Jupiter decentralised exchange at $2.4 billion (+50%), and Raydium at $2.2 billion (+58%).

This growth highlights the increasing demand for SOL as the ecosystem expands.

While Solana and Ethereum (CRYPTO:ETH) often attract comparisons, their growth paths are distinct.

Solana dominates memecoin activity, while Ethereum remains the primary network for decentralised finance (DeFi).

Solana's reliance on memecoins like BONK (CRYPTO:BONK) and POPCAT (CRYPTO:POPCAT) introduces some risk, as speculative interest may prove volatile.

In the derivatives market, SOL futures traders are paying a 23% annualised premium to maintain long positions, the highest level in seven months.

While this suggests bullish sentiment, analysts caution that excessive optimism could heighten liquidation risks during corrections.

Currently, Solana’s market capitalisation of $113.7 billion is significantly lower than Ethereum's $429.4 billion, suggesting room for further growth.

If market conditions remain favorable, analysts believe Solana could still achieve the $300 price target, backed by its robust ecosystem and onchain activity.

At the time of reporting, the Solana (SOL) price was $237.45.