Solana’s price is one of the best performing cryptocurrencies on the market, with gains exceeding 90% in 30 days, 133% in 14 days, and 62% in seven days. It’s as if the token, SOL needs a little nudge northward to win back the hearts of investors who walked away amid rumors of a dying network. In just a few weeks, Solana’s value has surged so that it is trading above the $20.00 level in reference to the December lows of $8.01.
Solana Ecosystem Death Rumors Might Be Exaggerated
A report from Messari, a leading cryptanalytics platform, has shed some light on the questions surrounding the possible threat to the existence of the Solana ecosystem. Nevertheless, we cannot deny the fact that the network has suffered a lot due to its close relationship with the defunct FTX exchange. Almost all of the value locked (TVL), blockchain transactions, and token value in the ecosystem has been backed by FTX and its sister company Alameda Research.
As powerful as almost any other Layer 1 protocol, the Solana ecosystem still has a builder network, an application ecosystem, and a financial war chest. Solana saw investors return in droves over the Christmas holidays, bolstered by these elements.
While the return of the Solana award is an encouraging story, it’s not exactly as depicted above. Ecosystem activity began to ramp up after Ethereum co-founder Vitalik Buterin highlighted the Solana network in one of his tweets, with nothing but support.
Another factor in Solana’s price hike is the launch of the first meme coin, BONK, on the blockchain in late December. When the coin went viral, its market cap skyrocketed to $200 million before gradually fading to $55 million at the time of writing.
To a large extent, the upward trend in Solana’s price to $24 was heavily influenced by speculation, however, the network is strong and an app ecosystem is thriving.
Solana’s key fundamentals are on a positive trend
Contrary to what was believed over the past two months that Solana’s network activity dropped significantly after the FTX implosion, daily active addresses transacting on the blockchain remained relatively unchanged after FTX.
Over the past few weeks, this metric has tripled from pre-FTX levels. The question remains: will these levels be maintained in the short term and possibly in the medium term? Nevertheless, this proves that the Solana network is on a positive trend, considering the impact of the collapse of FTX on the protocol.
Messari reports that the number of transactions and active accounts (exclusively controlling paid accounts) have increased to pre-FTX levels. It’s possible that speculation due to BONK’s launch may have fueled the breakout, however, these indicators suggest that the amount of user activity never actually decreased from pre-FTX levels, making it impossible to tell. isolate FTX collapse.
Did Solana make it through the days of network outages?
The Solana blockchain suffered a series of network outages in 2022, leaving investors worried. However, throughout the collapse of FTX, the network never suffered an outage, with the situation remaining the same after FTX. It’s been over three months since Solana went offline.
The updates the developers have been working on are working. Meanwhile, the ecosystem’s local fee market, also known as the local priority fee experiment, has proven to be effective – gas fees have remained relatively low, like base fees, except for a spike in priority charges, possibly due to a spike in activity. related to BONK.
It is difficult to compare Solana to other layer 1 blockchains, especially with big differences between fundamentals and price. Moreover, Solana’s market capitalization is significantly lower than that of its peers like Ethereum and Cosmos when evaluating metrics such as active users, stablecoin volume, and blockchain transactions.
Going forward, Solana’s price may keep the uptrend intact, supported by key user adoption mechanisms such as Neon, Solana Mobile Stack, and Solana Saga – which are expected to launch in 2023.
Solana Price Rally takes a break
Solana’s price fell slightly from $24.00 to trade at $23.12 at the time of writing. The smart contracts token has broken through major hurdles over the past few weeks, so the $25.00 supply zone cannot hold the rally back for long.
The Moving Average Convergence Divergence (MACD) indicator is anchored in a bullish position as it rises above the average line. A confirmed New Year’s buy signal is still intact, implying that buyers are in control.
In the event that Solana’s price falls further, it may not fall significantly below $20.00, as the $19.45 demand zone near the 200-day exponential moving average (EMA) (purple ), would dampen the bulls and pave the way for a rebound.
The path with the least resistance is bound to stay higher if the 50-day EMA (in red) maintains distance above the 100-day EMA (in blue). Price action above $25.00 would call more buyers, even institutional investors to reconsider Solana, thus allowing SOL to rally towards $100.
Interested traders can buy Solana and take advantage of the rally likely to reach $100 in a few months. However, investors may want to look to Meta Masters Guild (MEMAG) for its best risk-reward potential. For more details on MEMAG, follow the link below.
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