Solana (SOL) Gains 12% in a Day to Break Into the $12 Range – Here’s Why

The bear market of 2022 and the FTX collapse had a disastrous effect on Solana’s ecosystem, affecting its price accordingly.

A cylinder with hands and a shield holding swords with Solana Logo face mask.
  • The price of Solana has risen by 12.46% in the last 24 hours, returning to the $12 mark.
  • After FTX and Alameda Research collapsed, SOL fell rapidly from $35 to below double figures. 
  • The current rally coincides with Vitalik Buterin’s recent tweet for Solana.
  • Community members have high hopes for Solana going forward.

In what seems like a cease on selling pressure, Solana has soared by 12% in the last 24 hours,  returning to the $12 price mark, according to market data from Coinmarketcap. The recent increase comes after a massive decline to below-double figures.

The sudden rally coincides with the recent tweet of Ethereum founder Vitalik Buterin on Dec. 30. In the tweet, he heaped praises on Solana and hoped that the ecosystem would get a chance to thrive. 

Buterin described the downturn in the price of SOL as the washing out of “awful opportunistic money people.” 

After the prominent developer made the predictions, SOL embarked on a price rally as it walked a recovery path. Solana experienced a spike in active addresses on January 1, when other major blockchains like Ethereum, Polygon, and Cardano experienced slowdowns.

Solana’s market cap climbed from its seven-day low of $3.04 billion to $4.60 billion at press time.

Despite 2022 being a poor year for Solana, its co-founder Raj Gokal believes it washed out some bad actors and made the ecosystem more decentralized.

There are high hopes for Solana moving forward among some community members.

What Led to the Recent Downturn?

Following the collapse of FTX and Alameda Research, SOL fell rapidly from $35 to below double figures in less than a month. SOL declined because FTX and Alameda Research are the two most prominent coin holders. The crisis resulted in the liquidation of a substantial part of FTX and Alameda Research’s SOL holdings. 

Selling pressure mounted on the price of SOL, triggering a free fall.

Major projects in the ecosystem recently announced their intentions to leave Solana, contributing to the decline. Top projects like DeGods and y00ts have announced their plans to migrate to Ethereum and Polygon, respectively.

Vitalik Buterin’s tweet has breathed life into the token. 

On the Flipside

  • While the Solana ecosystem had a bad year, the number of transactions processed by Solana was significantly higher than any other blockchain.

Why You Should Care

At the beginning of the year, it was thought that Solana would do well among the Layer-2 blockchains. Nonetheless, the Solana ecosystem suffered as a result of the FTX crisis and the bear market of 2022. Despite this, recent price hikes may give the Solana community hope for a brighter 2023.

 

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The Great Solana (SOL) Migration: Why is Solana Dropping and Why Are Projects Moving to Other Chains?

Solana and Proof of History

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Soumen Datta

Soumen has been a dedicated researcher and writer in the field of cryptocurrencies for the last few years. Even though Indian crypto regulations are still unclear, he believes that India will continue to innovate in the years to come. He loves to play his guitar and sing along in his spare time. He holds bags mostly in BTC, ETH, BNB, MATIC, ADA.