Solana Prices Rally As Multiple Tailwinds Fuel Gains
Solana’s sol token experienced some notable upside recently, pushing higher as the digital currency benefited from several bullish factors.
The digital asset rose to as much as $152.50 today, Messari figures show.
At this point, it was up more than 30% from the recent low of $116.34 it reached on September 21, additional Messari data reveals.
These latest price movements took place after the cryptocurrency climbed more than 13,000% this year, reaching an all-time high of more than $200 earlier this month and then falling back to roughly $116 a few days ago.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Solana, which describes itself as the world’s fastest blockchain, has generated significant visibility, which has coincided with sharp gains in the sol tokens.
More recently, companies linked to the platform have been making headlines for their funding rounds.
Orca, a decentralized exchange, or DEX, which was built on Solana because of the platform’s sub-second finality, recently raised $18 million in a Series A round.
Grape Network, the project whose initial DEX offering, or IDO, was credited with helping bring the entire Solana network to a standstill, raised $1.2 million from venture capital firms. This came after the project’s IDO brought in $600,000.
These two events seem to fit into a broader pattern, as investors have been lining up to put their money into projects built on Solana.
“Solana ecosystem is the leading blockchain in terms of capital deployed in 2021,” “and this has surely fueled Solana's price appreciation in the last months,” said Loan Venkatapen, cofounder and managing partner of Blocklabs Capital Management.
John Iadeluca, founder & CEO of multi-strategy fund Banz Capital, also weighed in on how this activity helped provide a tailwind for sol.
“I think Solana’s token price is benefitting strongly from the surge in demand for Solana-built platforms,” he stated.
“I believe it’s due to the recent successful funding of multiple startups built on the ecosystem.”
“There’s a similar narrative that’s been told in the markets prior with other powerful chains hosting successfully funded blockchain startups, however, Solana’s jump of nearly 30% within the span of a few days suggests that investors may feel more confident with Solana as a successful contender,” concluded Iadeluca.
Buying The Dip
Market observers spoke to other factors behind the sol token’s recent gains, emphasizing that it fell substantially after reaching an all-time high and suffering the network outage earlier this month.
As a result, it became oversold, several analysts claimed, and as a result, investors seized the opportunity to buy the dip.
“I think that Solana price got oversold in September by traders due to an overall fear in the digital and traditional markets coupled with the recent Solana network outage,” said Venkatapen.
Iadeluca offered a similar take, stating that “the day after the Solana network crashed, SOL price briefly entered oversold territory, according to its RSI, before quickly trending upward.”
“I believe investors saw the combination of the network crash and the subsequent price scare as an opportunity to buy the dip, which has now driven the price back above the $150 level,” he added.
Digital currency investor Marius Rupsys also chimed in, stating that people “likely” “used the dip to increase exposure to Solana itself as they deem to be underexposed to it.”
“Many did not have Solana exposure at all, so this was a great opportunity to buy it.” he stated.
Nick Spanos, cofounder of Zap Protocol, also provided some input, elaborating on why he is optimistic about Solana and its prospects.
“Solana is getting activity because it has an on-chain order book, when you use Serum on solana. The chain is holding buy and sell orders on-chain,” he stated.
“It has 50k transactions per second with this on-chain order book. No other chain has done this so successfully and with such throughput,” noted Spanos.
“Serum on Solana is making it very easy to create a fully-liquid exchange,” he emphasized.
“My prediction, price-wise, is that Solana is at the very beginning.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.Source