Solana - SOL
Updated: Jun 21
Market Discovery of the most influential markets in the cryptocurrency world.
What is Solana (SOL) and how does it work?
Solana is an open-source project that uses blockchain technology's permissionless nature to provide decentralized finance (DeFi) solutions. Crypto Solana is the fastest blockchain and growing ecosystem with thousands of projects spanning from DeFi, and NFTs, to Web3 and more. The idea behind this blockchain solution was initially developed in 2017, however, Solana was officially launched by the Solana Foundation, with headquarters in Geneva, Switzerland; in late March 2020.
Solana's protocol has been designed to facilitate decentralized app development, with the aim to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain, making it a hybrid consensus Crypto blockchain. Because of this hybrid model, the Solana solution can help small-time traders as well as institutional traders. The main focus of the foundation is to make decentralized finance accessible on a larger scale.
What has made Stellar crypto so unique, has been its low transaction costs. Traditional cross-border payments are generally high in costs, with fiat-based payment solutions such as PayPal being a primal example, and similarly with congested blockchain networks such as Bitcoin and Ethereum. With stellar coin on the other hand every transaction costs just 0.00001 XLM (much less than $0.01), making it more affordable and a better means to transact.
Additionally, XLM crypto managed to secure partnerships with big-brand technology companies and fintech firms, such as teaming up with IBM to launch World Wire, a project that allowed large financial institutions to submit transactions to the Stellar network and transact using bridge assets such as stable coins. Unlike many other blockchains that have community funds, meaning that projects that help further the ecosystem can be sponsored, Stellar allows its users to vote on which ventures should be given this support, making it a more fair community approach.
Last update 28/3/2022
Solana initially launched on Binance in April 2020 at around $0.22, followed by a price increase to $0.86 in just the first week, a price level that it would never see again as it grew exponentially over the following months. Following that initial move, Solana's price would rise to over $50, or over 220x from launch price. This spike was followed by a few months of retracement in mid-2021, mainly due to the overall market retracing and Bitcoin price falling to previous support levels. Towards mid-2021 and the beginning of 2022, Solana USD saw its biggest price increase, rising again by an astonishing 740%, and reaching an all-time high of over $250. This was one of the most successful price increases of a coin during that period, making high profits for traders.
After reaching its ATH in late December 2021, Solana has retracted and has fallen below several support levels, first, around $200, then around $140, and finally below $100, where it currently stands. On high time frames we can see Solana to USD breach several key support levels, in particular as it lost the 20EMA level, in early January 2022, and consequently, when it lost the 50EMA towards the end of the same month. This is not a great sign as it signalled an end of the bull market and potentially the beginning of a bear one. For the outlook of the market to change Solana would have to regain the 50EMA with a push that would see its price testing the $110 price range, coinciding with the upper resistance level, just below the 20EMA. If prices manage to break above this level and consolidate, it's likely to see a change in trend.
Solana price prediction would suggest that after many months of falling prices, Sol might have bottomed out. With a current retracement of nearly 70% from ATH Solana is currently trying to push for higher levels, potentially around its next resistance level at $110. If prices manage to reach this resistance level, it would be extremely bullish for the coin and it could signal a continuation in the trend in the following months. However, if the coin fails to hold the current level and breaks below the support level, it would be catastrophic and we could see prices drop as low as below $50.