(SOL) surpassed Cardano (ADA) and leading stablecoin Tether (USDT) to become the fourth largest cryptocurrency by market capitalization.
At the time of publication, the net worth of total SOL tokens in circulation was just over $ 76 billion, just behind Binance Coin (BNB) $ 109 billion, Ether (ETH) $ 540 billion, and $ 1. , 17 trillion Bitcoin (BTC).
Meanwhile, the market capitalization of Cardano and Tether turned out to be $ 66.39 billion and $ 74.42 billion, respectively.
$ 100 million fund launch fuels SOL’s bullish outlook
Solana’s market capitalization soared as its native token, SOL, rose to another record high. On November 7, SOL’s price topped $ 262 for the first time in history, primarily due to a market-wide price rally that saw other major cryptocurrencies make similar gains.
In the meantime, SOL received additional bullish signals from Solana’s foray into Web3 game development through its venture capital arm.. Nicknamed Solana Ventures, the firm announced on Friday that, together with FTX and Lightspeed Venture Partners, it would invest $ 100 million in the gaming studios and technology sector.
In doing so, Solana Ventures aims to attract desktop and mobile video game developers to build their projects on its public blockchain, increasing the possibility of further SOL adoption.. A similar adoption boom in 2021 helped drive SOL’s price up nearly 17,500% year-to-date, from $ 1.51 to $ 262.45.
The uptrend emerged as speculators began treating Solana as one of the most serious challenges for Ethereum, the leading smart contract platform facing higher gas rates and network congestion issues.
For example, Solana claims that it could process between 50,000 and 60,000 transactions per second (tps) for an average transaction fee of $ 0.00025. Compared, Ethereum carries out transactions of 15 to 30 tps, with an average transaction cost that ranges between USD 4 and USD 21.
Paul Veradittakit, a partner at Pantera Capital, told Bloomberg, he called Solana “the main competitor” to Ethereum, Cardano and other smart contract platforms, with respect to “developer adoption and momentum.”
However, Solana also showed signs of resource depletion, that is, a lack of prioritization between SOL transactions and fewer validators leading to an eighteen-hour network outage in September. If not corrected, it could increase the risks of reversed or altered transactions on Solana’s network.
SOL price correction risks
Despite its latest rally to an all-time high, SOL is at risk of a correction due to at least two bearish indicators.
First, SOL’s price has been forming an ascending wedge, a technical pattern that generally results in lower prices. And secondly, the cryptocurrency has also been confirming a bearish divergence between its rising price and its declining momentum (as confirmed by the lower spikes in its daily Relative Strength Index).
Paul Veradittakit, a partner at Pantera Capital, told Bloomberg, called Solana “the top competition” to Ethereum, Cardano, and other smart contract platforms, regarding “developer adoption and momentum.”
A break below the lower trend line of the wedge, if accompanied by an increase in volume, would run the risk of causing the price of SOL to fall as low as the maximum height. That puts the SOL’s downside target roughly at levels between $ 205 and $ 91.52, depending on which level the bearish breakout begins at.
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