In recent weeks, SOL's performance has been outstanding, with its increase even surpassing that of BTC and ETH.
Surface Prosperity: Why is SOL Strongly Rising?
From the data, Sol's market share has significantly increased since June of this year, achieving an excess return of 42% compared to other cryptocurrencies. Its decentralized exchange DEX has reached a trading volume of 8 billion USD in the last 24 hours, far exceeding BNB Chain (1.8 billion), Base Chain (1.6 billion), and Ethereum (1.8 billion). This is mainly attributed to its meme coin platform PUMP within the ecosystem, which contributed 5.8 billion USD in trading volume.
In addition, Sol's TVL is also close to its historical high.
The hidden concern behind the data: is the growth sustainable?
However, as I dug deeper, I found some warning signals worth noting:
On-chain activity has not grown in sync: despite huge trading volumes, the weekly transaction fee income on the Sol chain, the number of daily active addresses, and the number of users continuing to trade have not returned to last year's Q4 levels. This indicates that a large volume of trades may come from 'wash trading' or market manipulation, rather than real user growth.
The growth of TVL is driven by coin prices, not ecological development: if calculated in SOL terms, the on-chain TVL growth has stagnated over the past five months. Recent TVL growth has almost entirely been driven by the rise in SOL coin prices, rather than real capital inflows or ecological application development.
Relying on a single ecology: the trading activity of the entire Sol ecology is highly dependent on PUMP, and the platform artificially supports its token price through a buyback mechanism. Whether this model can be sustained remains to be seen.
Key position: how to judge the future trend of SOL?
Sol's market share is currently at a critical technical range. Historical data shows that its market share has been constrained within the range of 2.2% to 3.8% over the past two years, and the current level is close to the upper range of 3.6%-3.8%. Historically, every time it reaches this area, it faces enormous profit-taking pressure, leading to SOL weakening relative to other cryptocurrencies.
Current strategy: opportunities and risks coexist
In the short term, the market's enthusiasm for Sol and Meme coins remains high, which may drive Sol's market share to new highs, bringing an additional increase of 10%-20%.
But rational traders need to start thinking: when the market frenzy ends, where will the funds flow? Will they return to BTC after taking profits, or rotate to other assets?
For most traders, chasing trends and looking for 'hundredfold coins' is often a dangerous game.
Data shows that over 99% of PUMP traders ultimately lose money and the ones who profit are often the project parties and influencers.
Advice to everyone:
For those who have already bought SOL, consider gradually reducing positions when SOL's market share approaches 3.8%, rotating profits into more stable assets like BTC.
Investment is essentially about seeking a balance between probability and risk. In today's noisy market, it is more important to remain rational and protect the principal than to chase short-term gains.
