Solana (SOL) has been moving down since November 2021, and the price of this cryptocurrency crashed the last two week to levels not seen since March 2021. But where is the price of Solana (SOL) going next, and what can we expect from the rest of Q4, 2022?
Many cryptocurrencies, especially SOL, came under selling pressure last trading week as the FTX crypto giant and its founder Sam Bankman-Fried went bankrupt and ended up with a huge liquidity gap of over $8 billion.
Today, the Crypto Lists team will discuss SOL price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk and how much margin you have if trading with leverage.
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SBF was a huge investor and proponent of Solana
Solana is one the most performant blockchain in the world that is designed to keep fees low for applications with billions of users. The average fee per transaction (TPS) is around $0.00025, and according to its official website, Solana can process 50k transactions per second. Currently, with huge amount of transactions, they handle about 1000 TPS and in total – 114,740,735,051 Solana transactions has been made.
Solana has many similarities with other blockchain projects such as Ethereum, Zilliqa, or Cardano, but to differentiate itself, Solana introduces a combination of architectural design choices that focuses on flexibility. The co-founder, Ukrainian born Anatoly Yakovenko that lives in California since he was young, has handled the overview of development for operating systems at Qualcomm and also the compression at Dropbox, before starting the Solana coin. He has two patents for high performance operating systems protocols – which is more than other blockchain founders that we know about.
Supply: 307,782,016 / 511,216,000
Release date: April 10, 2019
Description: One of the fastest blockchains with the best developers. Buy Solana and help build the future of the network.
Risk warning: Trading, buying or selling crypto currencies is extremely risky and not for everyone. Do not risk money that you could not afford to loose.
Solana enables developers to write and launch customizable applications in multiple programming languages, while the SOL cryptocurrency plays a key role in maintaining and operating the Solana ecosystem.
Many cryptocurrencies, especially SOL, came under selling pressure last trading week after FTX crypto giant and its founder Sam Bankman-Fried went bankrupt and ended up with a huge liquidity gap of over $8 billion. He’s stepped down from his role as CEO, while FTX Group, which consists of FTX.com, FTX US, Alameda Research, and over 130 affiliated entities, have all filed for Chapter 11.
While the cryptocurrency market recovered a bit over the past couple of days, the question remains if the worst is over for SOL. Sam Bankman-Fried was a huge investor and proponent of Solana, and because of this, the collapse of FTX had an even bigger influence on Solana than on some other cryptocurrencies. Apparently, Sam owned about 10% of all Solana coins since he was an early investor and made a deal directly Solana to purchase a big amount.
In the short term, this situation will continue to influence Solana negatively; still, investors should keep in mind that Solana has a decent amount of users, and it will probably get over this negative case. Most likely, FTX’s Solana assets will be sold at a discount to the highest bigger, at some point in time. It might be weeks or months, or even years – depending on how the situation unfolds. By being the second biggest donor to the Democratic Party and Joe Biden, many crypto analysts question if he is even if going to be sentenced in the U.S.
Cryptocurrency influencer Ben Armstrong said:
“Sam Bankman Fried was certainly a huge investor and proponent of Solana, but he was not Solana. Solana particularly enjoyed many investments by venture capital funds during the last market cycle, and without that money artificially pumping it, Solana will have to go back to the old-fashioned utility to get people excited again. If the team behind Solana focuses on this, Solana will survive, but it will be a long road back to legitimacy.”
– Sam Armstrong aka Bitboy
On the other side, the softening inflation in the United States is certainly positive news for riskier assets like stocks and cryptocurrencies, and according to Bank of America, the U.S. central bank could ease its monetary policy. Cooling inflation could push the Federal Reserve to take a less aggressive stance in its interest rate hikes, and if this happens, we could see some recovery in the cryptocurrency market.
Technical analysis for Solana (SOL)
Solana (SOL) has weakened from $38.78 to $12.08 since November 05, 2022, and the current price stands at $13.75. Solana (SOL) might have a hard time holding above the $12 level in the upcoming days, and a break below this level would indicate that SOL could probably test the price level at $10.
On the chart below, we can see that Solana (SOL) has been moving down since November 2021, and as long the price of SOL is below $50, it remains in the SELL-ZONE.
Important support & resistance levels for Solana (SOL)
On this chart (the period from March 2022), I marked important support and resistance levels that can help traders to understand where the price could move. Solana (SOL) remains under pressure, but if the Solana price advances above $30, the next target could be $40 or even resistance that stands at $50. The current support level is $12, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $10. If the price drops below $10, which represents an important phycological support level, the next target could be located around $8.
What speaks for the rise in the Solana (SOL) price
The last several days have been extremely taff for the cryptocurrency market, and cryptocurrencies have been suffering as the FTX crypto giant went bankrupt. The risk of further decline for SOL is not over; still, if the price advances above $30, the next target could be $40 or even resistance that stands at $50.
What indicates further downfall for Solana (SOL)
Solana (SOL) has weakened more than 60% since November 05, falling from $38.78 to a low of $12.08. Because of its ties to Alameda Research, the trading firm of Sam Bankman-Fried, Solana suffered a massive crash. While the cryptocurrency recovered a bit over the past couple of days, the question remains if the worst is over for SOL? The current Solana (SOL) price stands at $13.75, which is approximately 90% off from its 2022 highs registered in April and over 93% down from a year ago. Solana (SOL) might have a hard time holding above the $12 level in the upcoming days, and a break below this level would indicate that SOL could probably test the important psychological support level at $10.
What do analysts and experts say
Sam Bankman-Fried, the founder and CEO of FTX, was a huge investor and proponent of Solana, and because of this, the collapse of FTX had an even bigger influence on Solana than on some other cryptocurrencies. In the short term, this situation could continue to negatively influence Solana; still, investors should keep in mind that Solana has a huge amount of users, and it will probably get over this negative case. During Solana Breakpoint in Lisbon, 2022 – it was shown that Solana developers increased over 1000% – between 2021 and 2022. So the developer community is definitely believing in Solana. But when will investors start to appreciate Solana again? It’s hard to guess. It could be days, weeks, months or years.
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Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.
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