The day after the Federal Reserve implemented the 50 basis point hike, Solana (SOL) saw accumulation rather than sell-off despite the altcoin’s 4% decline.
Bitcoin and Ethereum and other cryptocurrency prices fell on December 14 as reports surfaced that the central bank had hiked interest rates.
But the situation is different now. CoinGecko reports that the token is down another 5% today, with notable declines over the past week, bi-weekly and monthly. The SOL price is currently 135% below its intrinsic value.
SOL change in public opinion
The SOL coin futures market has been showing a positive investment rate since yesterday, confirming the bullish tone of on-chain analytics. However, it soon turned negative, reflecting a change in public opinion regarding SOL.
Speculation could be responsible for the altcoin’s recent price surge and subsequent price drop, as is common with most cryptos. The current support at $13.38 is important as the market is already pricing in the central bank rate hike.
Even as there is news of greater institutional interest in crypto and blockchain technology, if major cryptocurrencies like BTC and ETH continue to suffer, the broader crypto market will be dragged down.
SOL Total Market Cap at $4.9B | Chart: TradingView.com
Solana: Down, but not done yet
Crypto research firm Messari recently released a comprehensive assessment of the Solana ecosystem.
Positively, although FTX and Solana are closely intertwined due to Alameda, the ecosystem has continued to implement technical advances that focus on Solana’s key pillars, namely speed and scalability.
According to the review, Solana’s DeFi space has been badly damaged. However, the environment is not dead. The study shows that there are numerous applications on Solana, even though the TVL has dropped by a staggering 70% since the FTX disaster.
In Q1 2023, Helium will migrate all of its operations to Solana’s blockchain.
This is a hugely positive move for both Helium and Solana, which could push up the price of HNT and SOL.
However, investors in SOL should be wary of short and medium-term losses as the rising correlation between the token and BTC and ETH could turn bearish on Messaris Research.
SOL investors expect greater long-term gains as the Solana ecosystem develops and the market strives to recover from the disaster caused by the FTX implosion.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.