Solana saw a significant increase of approximately 20% during the last days of September and the first week of October. This sudden price increase has piqued the interest of investors and enthusiasts alike, sparking debates about its underlying causes.
A prominent question on people’s minds is whether this increase in SOL value is directly correlated to bitcoin‘s performance over the same period or if there are different factors driving SOL’s price rise regardless of bitcoin‘s movements.
Before this increase, SOL fell on hard times because a US court allowed the sale of SOL worth $1.3 billion from the bankrupt exchange FTX. Therefore, there is curiosity as to whether SOL’s recent price surge is related to bitcoin or if there are other factors behind it.
Solana: challenges and market attractiveness
The Solana (SOL) blockchain network has experienced recent difficulties, however, it has attracted significant attention and demand in the market. Despite the lackluster price performance of its native token, the proof-of-stake (PoS) network has used the bear market to enhance its technological capabilities and forge important partnerships with prominent entities in the traditional banking space.
Source: Coingecko
The bankruptcy court has implemented mechanisms to mitigate the potential adverse impact of the liquidation of FTX assets on the cryptocurrency market. These measures involve requiring the sale of assets through a financial advisor in weekly installments, complying with predetermined regulations.
At the time of writing, SOL was trading at $23.43, down a paltry 0.3% in the last 24 hours, but gained maintained a rebound of 18% in the last seven days, data from crypto market tracker Coingecko shows.
SOL liquidity soars with network stability
Nansen, an on-chain analytics company, recently published a report on Solana, highlighting its key strengths and potential. Solana is known for its profitability and high-speed transactions, earning it the nickname “The ethereum Killer.” It boasts a transaction processing speed of over 3000 transactions per second, which is almost 30 times faster than ethereum.
On-chain liquidity improved as a result of the dramatic increase in network stability. At press time, the TVL in SOL terms was $27.12 million, more than double what it was at the beginning of the year.
SOL market cap currently at $9.7 billion. Chart: TradingView.com
Solana’s rise, fueled by DApps and NFTs, aims for fifth largest crypto spot
SOL’s rise was further bolstered by the expansion in the adoption of decentralized applications (DApps) and increasing non-fungible token (nft) volumes on the Solana blockchain.
The current SOL price is now making efforts to establish a support level at $23, aiming to solidify its position as the fifth largest cryptocurrency (excluding stablecoins) in terms of market capitalization.
In the recent Epoch 512, 19,637 million SOL were lost from betting, with a net stake of 16,516 million SOL (around $372 million). The majority belonged to a16z and the former Alameda (now or ftx estate).
a16z: BZpEFk…oPPBm7 without betting 5,006 million SOL, a16z-2: GCmFQL…ozXMwY without betting 2,033…
– Wu Blockchain (@WuBlockchain) October 6, 2023
Meanwhile, recent updates from Solana Compass have revealed details about recent activities in the Solana network, particularly during the 512 epoch.
The website that monitors SOL staking activity suggests that there were around 19.637 million SOL coins that were not staked during this time.
(The content on this site should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk.)
Featured image from iStock
