The technical efficiency is the principal force behind price action in the solana to usdt market: The Solana network handles 65,000 TPS (15 TPS on Ethereum) and an average of 0.0001 USDT (1.2 USDT on Ethereum ERC-20 USDT) in transaction fees per trade, making it the first preference for high-frequency traders. Visa tested in 2024 the ability of Solana to settle $1 billion cross-border USDT payments in just 8 minutes with 92% cost reductions and bringing the daily USDT volume traded on the SOL network to exceed 1.5 billion, which is 39% of total stablecoin traffic on the entire network. Solana’s staking return is annualized at 5.8% (0% for USDT), and this additionally makes the investors interested in trading USDT with SOL with an aim to earn profits, hence the weekly volume of solana to usdt on Coinbase is 73% higher than last week.
Ecological expansion is also a critical parameter: The TVL of Solana DeFi expanded from 210 million US dollars in early 2023 to 5.13 billion US dollars in July 2024 at a growth rate of 2340% annually. Among them, Sabre stablecoin protocol’s SOL-USDT liquidity pool expanded to 2.8 billion US dollars, offering an extremely low-slippage exchange of 0.01%. At the same time, the proportion of USDT settlement on Solana NFT platform Magic Eden increased from 12% in 2023 to 68%, and its on-chain trade volume exceeded more than 660 million US dollars, encouraging creators to settle their USDT profits in SOL for paying on-chain fees (burning approximately 180,000 SOL per day on average). In June of 2024, when Helium Mobile shifted to Solana, its 2 million users’ phone bill refills were carried out through solana to usdt, and USDT’s on-chain circulation volume increased by 470 million in a week.
Macroeconomic and policy measures also have a strong impact on the market: Speculations surrounding the Federal Reserve’s 2024 rate reductions are gaining momentum, causing the US Dollar index (DXY) to fall by 4.2%, promoting the worldwide flow of USDT exceeding 98 billion US dollars (annual growth rate of 32%), 15% of which flows into crypto risk assets through solana to usdt. Regulatory risks, however, must not be discounted – Coinbase’s listing by the US SEC of SOL lowered its price 9.3% within a day last July, while Tether’s disclosure report announcing the holding of 83 billion US dollars of US Treasury bills with a 102% reserve cover ratio settled USDT as the final safe-haven. On-chain metrics show that with the regulatory sensitive period, 30-day volatility on the SOL-USDT pair grew from 45% to 68%, but the risk of network outages was minimized from an average of 7 per year to 0.2 per year through the Firedancer upgrade. Technical resiliency enabled the price to recover by 11.5% within 48 hours.
Market sentiment and leveraging on derivatives bring about a self-reinforcing cycle: According to CoinGlass data, SOL perpetual contract open position reached an all-time high of 830 million US dollars (12% of the total market), volatility range of funding rate oscillated between -0.03% and +0.08%, and the effect of Short Squeeze was triggered four times during 2024 with an average increase of 23%. The options market shows the open interest of SOL/USDT call options with a strike price of 160 USDT is 35%, and the probability of an increase over the next month before the close of August is 62%. Additionally, the active addresses on the Solana chain have gone over 1.4 million (compared to 390,000 on Ethereum), and the daily average solana to usdt exchange requests exceed 4.7 million. The user density is 2.7 times denser than the BSC chain, forming a moat for the network effect.
On-chain data verifies the cyclical tendency: If SOL’s RSI strength indicator relative to USDT is below 40, then the probability of its growth within the next 30 days is 78% (historical sample accuracy 87%), and the correlation coefficient between the rate of SOL/USDT and Bitcoin reduces from 0.92 to 0.65, illustrating the independent market characteristic. For instance, after the halving of Bitcoin in May 2024, SOL gained 41%, while BTC gained a mere 12%. This was partly because the Solana ecosystem AI project io.net gained over 1.7 billion US dollars’ worth of computing power staking, forcing institutions to hedge their positions through solana to usdt. Ultimately, technological cycles (such as the 1 million TPS anticipated to be achieved in Q4 2024), regulatory clarity, and dollar liquidity looseness or tightness will continue to dictate market volatility boundaries and value hubs of this trading pair.