On the day following the implementation by the US Federal Reserve of the 50-basis point hike, Solana (SOL) saw accumulation rather than a sell-off, despite the altcoin’s 4% decline.
Prices for Bitcoin and Ethereum and other cryptocurrencies fell on December 14 as reports surfaced that the central bank raised its interest rates.
The situation is different now, though. CoinGecko reports that the token dropped another 5% today, with significant declines over the past week, biweekly, and monthly periods. SOL price is currently 135% lower than its intrinsic value.
SOL Change In Public Opinion
The futures market for SOL coin indicates a positive investment rate from yesterday, confirming the optimistic tone of on-chain analytics. However, it soon turned negative, reflecting a change in public opinion regarding SOL.
Speculation may be to blame for the recent price increase of the altcoin and subsequent price drop, as is normal with most cryptos. The current support at $13.38 is important because the market is already factoring in the central bank’s interest rate hike.
Even if there is news of greater institutional interest in crypto and blockchain technology, the broader crypto market will be dragged down if big cryptocurrencies like BTC and ETH continue to suffer.
SOL total market cap at $4.9 billion | Chart: inew.news
Solana: Down But Not Finished
The crypto research firm Messari has recently published a comprehensive assessment of the Solana Ecosystem.
Positively, even though FTX and Solana are tightly intertwined because of Alameda, the ecosystem has continued to implement technical advancements centered on the key pillars of Solana, namely speed and scalability.
According to the overview, Solana’s DeFi space has been severely damaged. However, the environment is not dead. The study indicates that there are numerous applications on Solana, despite the fact that the TVL has decreased by a staggering 70% since the FTX disaster.
In the first quarter of 2023, Helium will migrate all of its activities on Solana’s blockchain.
This is an extremely positive venture for both Helium and Solana, which might boost the price of HNT and SOL.
However, investors in SOL should be wary of short- and medium-term losses, as the rising correlation between the token and BTC and ETH could render Messari’s research bearish.
SOL investors anticipate greater long-term gains as the Solana Ecosystem evolves and as the market strives to recover from the catastrophe brought about by the implosion of FTX.