In the ever-evolving landscape of crypto, one name that has garnered significant attention is Solana. Its meteoric rise was followed by a turbulent period, leaving many to wonder about its destiny. In this article, we delve deep into the intriguing question: ‘The Death or Rebirth of Solana?’ Join us on a journey to understand the forces at play and the potential outcomes that await this blockchain platform.
What is Solana?
Created by a team of Qualcomm veterans, Solana (SOL) has positioned itself as a solution to many of Ethereum’s most critical issues, namely slow transaction times, high gas fees, and poor scalability. The Solana network claims to be able to process up to 65,000 transactions per second (TPS) on a single global state, a significant upgrade to Ethereum, which is limited to around 15 TPS.
While Solana lacks the adoption of the Ethereum network, the assumption is that the project’s underlying technologies will allow it to scale in a far more efficient manner. Solana is of particular interest to developers and users who have grown fed up with the high gas fees and slow development pace of the Ethereum network.
What’s Unique About Solana?
Solana realizes high speeds through its unique proof-of-history (PoH) mechanism, which serves as a decentralized timestamp that keeps track of the order of events. Through PoH, Solana is capable of executing smart contracts in a secure and concurrent manner, granting it an advantage of proof-of-work (PoW) blockchains such as Ethereum, which are often bottlenecked by consensus mechanisms. As with other “Ethereum Killers” such as Cardano (ADA), Solana represents an attempt to iterate on the innovations of the original Ethereum network from a clean state of development. Though the Solana ecosystem is far less mature than Ethereum’s, the relative efficiency of Solana transactions may give it a key edge should the release of Ethereum 2.0 fail to materialize in the near future.
There are 2 main categories in Solana Ecosystem that they mainly build infrastructure in 2023:
Key Insights
- Solana has had a volatile price history, reaching an all-time high of $260 in November 2021 before crashing to $9 in November 2022.
- Solana (SOL) may witness a 410% hike to soar all the way up to $100, says crypto influencer Alex Wacy. Wacy, who is a contributor to crypto projects Entangle Protocol and Massa Labs, believes that the recent decline in key network metrics of Solana presented a long-term investment opportunity for crypto traders.
- Solana moved back to Layer1 race with ETH, APT, SUI
- Solana has drawn the short end of the stick so far, in terms of price action and bullishness.
To put things into perspective, Solana was one of the star cryptocurrencies of 2021.
However, 2022 saw Solana drop straight down from this high to about $40 in November before the FTX/Alameda crash sent it to $9.
The question now is:
Is SOL about to make a stellar return and become the star cryptocurrency of 2024?
Solana’s recent good news:
- Shopify plans to integrate with Solana Pay, allowing “millions of entrepreneurs and merchants” to have access to no-fee, Web3-native payments.” Maker is looking into the possibilities of building a new DeFi lending protocol on an appchain using Solana’s SVM. And most recently, Visa is extending USDC settlements to Solana.
- MakerDAO co-founder Rune Christensen hints at transitioning to Solana for MakerDAO’s upcoming blockchain, NewChain. Solana co-founder Anatoly Yakovenko said in Twitter that MakerDao’s consideration of Solana tech is a “win for open source.” And, he further extended the Solana technology will come back to the Layer 1 race with Ethereum, Aptos, Sui soon.
- Overall, LSDs have grown as a category across crypto in 2023 in large part due to the new dynamics around staking on Ethereum, though demand for these products has trickled into the Solana ecosystem as well,” Peng wrote. So far this year, about 1.66 million SOL, equating to $31 million, has been deposited into LSD protocols, which shows that increased inflows are partly responsible for the jump in liquid staking TVL. Another key factor propelling this trend is the increase in the price of Solana’s native token, SOL, which has soared by about 60%. This price appreciation has contributed to enhancing the value of SOL deposits in liquid staking.
Technical Analysis
In the weekly timeframe (T-F), Solana completed its Elliot Wave pattern, reaching an all-time high (ATH) of $260 in November 2021, and then saw a significant decrease of 90% from its ATH, trading above $10 by the end of 2022. However, SOL staged an impressive comeback in 2023. Despite making initial gains in January, SOL has primarily been trading sideways, with its price accumulating in the range of $13 to $28 since February 2023.
Taking a closer look at the daily timeframe (T-F), the price is currently trading above the 34, 89, and 200 EMA (Exponential Moving Averages). However, it’s worth noting that daily candlesticks are forming Bearish Patterns, indicating a potential trend reversal towards a downward trajectory.
In the event that SOL fails to reclaim the $25 mark, we may see the price falling to $14 or even dropping below $10.
How likely is SOL to become the star cryptocurrency of the next bull run?