Solana (SOL) overtook Cardano (ADA) to pioneer stablecoin Tether (USDT) to become the fourth largest cryptocurrency by market value.
At time of publication, the total net worth of SOL tokens in circulation exceeded $ 76 billion, after just Binance Coin (BNB) $ 109 billion, Ether (ETH) $ 540 billion and Bitcoin (BTC) $ 1.17 trillion.
The top ten cryptocurrencies by market value as of 13:30 UTC, November 7. Source: messari
Meanwhile, the market value of ADA and Tether is $ 66.39 billion and $ 74.42 billion, respectively.
$ 100 Million Fund Launch Increases SOL’s Positive Outlook
Solana’s market value skyrocketed as its parent token, SOL, climbed to a new all-time high. On November 7, the SOL price surpassed $ 262 for the first time in history, mainly due to a market rally that has led to a corresponding rise in other cryptocurrencies.
Meanwhile, SOL has received new optimistic signals from Solana’s entry into Web 3.0 game development in the form of a venture capital warning. Solana Ventures announced Friday that it is investing $ 100 million in gaming studios and the tech sector with FTX and Lightspeed Venture Partners.
As such, Solana Ventures aims to bring desktop and mobile video game developers to build their projects at the top of the public blockchain, thereby further increasing the adoption potential of SOL. A similar implementation boom in 2021 helped push SOL’s price up nearly 17,500% this year, from $ 1.51 to $ 262.45.
Briefly about the Solana ecosystem. Source: Telegram-channel Solanians
The upside potential emerged when speculators began to view Solana as one of Ethereum’s most dangerous rivals, the leading smart contract platform struggling with rising gas charges and network congestion issues.
For example, Solana claims to be able to process 50,000 to 60,000 transactions per second (TPS) with an average transaction fee of $ 0.00025. By comparison, Ethereum processes 15-30 transactions per second with an average transaction value of $ 4 to $ 21.
Compare smart contract platforms. Source: Solwealth
Paul Viraditakit, partner at Pantera Capital, told Bloomberg that Solana is “the biggest competitor” to Ethereum, Cardano and other smart contract platforms in terms of “developer adoption and growth.”
RELATED: Solana Raises Cardano to the Top 5 As SOL’s Market Value Exceeds $ 70 Billion
However, Solana also showed signs of resource depletion – a lack of SOL transaction prioritization and a reduction in the number of validators, leading to an 18-hour network outage in September. Failure to do so may increase the risk of cancellation or rollover of transactions on the Solana network.
Correction risk for SOL. price
Despite its recent rally to record highs, SOL risks a correction due to at least two bearish indicators.
First, the SOL price has formed a bullish wedge, a technical pattern that usually drives prices down. Second, the cryptocurrency also confirmed the bearish divergence between the price rally and the low momentum (as evidenced by the lower peaks of the daily RSI).
The daily chart of the SOL / USD exchange rate is characterized by a rising wedge and diverging price dynamics. Source: TradingView
A break below the lower wedge trendline, if accompanied by an increase in volume, could cause the SOL price to fall as hard as the maximum rally. This sets the target for a decline in SOL at around $ 205 to $ 91.52, depending on where the flare of the decline begins.