At the time of writing, the total value of SOL tokens in circulation was just over $76 billion, trailing only Binance Coin’s (BNB) $109 billion, Ether’s (ETH) $540 billion, and Bitcoin’s (BTC) $1.17 trillion in market capitalization.
On the other hand, Cardano’s market value is $66.39 billion, whereas Tether’s is $74.42 billion.
SOL’s positive outlook improves with the introduction of a $100M fund
The value of Solana’s native cryptocurrency, SOL, soared to new highs, boosting the company’s market capitalization. The price of SOL surpassed $262 for the first time on Nov. 7, thanks to a market-wide price increase that saw other leading cryptocurrencies post comparable gains.
Meanwhile, Solana’s entry into Web3 gaming creation through its venture capital arm sent additional optimistic signals to SOL. The business, known as Solana Ventures, said Friday that it will invest $100 million in gaming studios and technologies alongside FTX and Lightspeed Venture Partners.
Solana Ventures hopes that by doing so, it would be able to recruit desktop and mobile video game developers to construct products on top of its public blockchain, increasing the likelihood of SOL adoption. In 2021, a similar adoption surge sent the SOL price up about 17,500% year-to-date, from $1.51 to $262.45.
The upswing began when traders began to see Solana as one of the most significant threats to Ethereum, the dominant smart contract platform that is suffering from increasing gas prices and network congestion.
Solana, for example, promises to be capable of processing 50,000-60,000 transactions per second (tps) with a transaction price of $0.00025. Ethereum, on the other hand, transacts 15-30 times a second, with a median transaction cost of $4 to $21.
Nonetheless, Solana showed symptoms of resource fatigue in September, including a lack of precedence among SOL transactions and a smaller number of validators, which resulted in an eighteen-hour network outage. If not addressed, there is a danger of transactions being reversed or changed across the Solana network.
Risks of a SOL price correction
Despite its recent run to an all-time high, SOL is at risk of a reversal, as at least two negative indications point to a fall.
To begin with, the SOL price has been creating a Rising Wedge, which is a technical pattern that normally leads to lower prices. Second, the cryptocurrency has proven a negative split between its growing price and falling momentum (as confirmed by lower highs on its daily relative strength index).
If a break below the Wedge’s lower trendline is followed by a spike in volume, the SOL price might fall as far as the maximum height. SOL’s downside objective is around $205 to $91.52 depending on when the bearish breakout starts.