The touted “Ethereum killer” Solana has been on the down-low since its association with the collapsed exchange FTX. However, it seems as though 2023 has new plans for the struggling ecosystem with its native token SOL up by 13% based on CoinGecko figures, Tuesday.
This huge uptick in price led to SOL reclaiming double digits after dipping as long as $7.96 back in December 29.
A Breath Of Fresh Air For Solana
After the ecosystem lost most of its value last year, this price pump is a breath of fresh air for investors and holders of SOL. Even though the bears left their mark on investor sentiment on SOL, some are still bullish for a possible reversal.
This, however, is not surprising. Solana has been taking its time in distancing itself from being known as one of the “Sam coins”, with Messari releasing a detailed overview about the ecosystem on December 15.
Solana’s token isn’t the only one that was hit hard, however. Solana’s NFT market has suffered through this whole debacle as DeGods and y00ts, two of the most prominent collections on-chain, decided to migrate to Polygon.
Solana NFTs sure don’t look dead pic.twitter.com/UXNqJ6wRyi
— Mamba 🐍 (@Mamba248x) December 31, 2022
However, this has not stopped Solana from still maintaining its top 2 spot in terms of NFT sales volume. Transactions also support a bullish future for its native token as it still retains its top 1 spot in transaction volume according to Delphi Digital, an institutional grade research platform.
With Solana leading in active addresses against competitors as well, we can definitely see why the SOL has just shot straight up.
Macro And FUD, Not A Great Mix
Even though the current bullishness is good news, investors and traders shouldn’t disregard the power of macroeconomics on crypto markets. With SOL still being highly correlated with Bitcoin, we can see SOL’s price move somewhat closely tied to BTC’s price movement.
SOL total market cap at $4.3 billion on the daily chart | Chart: TradingView.com
This is especially concerning as BTC is strongly correlated with the traditional financial market, going as far as following the S&P 500 and the Dow Jones Index in many instances.
Not to mention that the U.S. Federal Reserve does plan to increase its interest rate if inflation does not slow down in the coming months. This will cause a slow down for SOL’s recovery in the coming months if the situation does not improve.
For now, SOL investors are on their way to target $11.83 price resistance which, if broken, will provide a jump-off point for more gains in the future.
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