Altcoins have had a hard time over the last few weeks. Yet Solana has managed to breach a key resistance level that has gone relatively unnoticed. We discuss it and the repercussions in the article below.
Cryptocurrency seems more volatile than ever, and Solana has not escaped unscathed. It reached $205.3 in the last 24 hours, which was a slight increase in value on the previous day. This recent volatility across the market has meant that many have overlooked Solana’s key resistance barrier of $200 being breached, with many concentrating on losses as opposed to these key metrics.
Solana’s use and value
By no means has Solana had a golden ticket so far this year. Like many other altcoins, it lost just over 12% in the last few weeks. Over the past month, it has also lost 4% of its market valuation alone. However, the whole crypto market has risen around 0.6%, and if Solana can hold above this $200 mark, it is a strong signal of its future trends.
This uptick in its price has taken hold even though its daily trading volume is down. This has been at a significant level, around 36% and just over $6 billion. This shows that people are treading carefully, and Solana whales are holding their stock to see what may happen in the wider crypto markets before deciding to buy more or sell off current assets. Currently, the Solana price USD is hanging around that $200 mark. However, as a blockchain, Solana’s trajectory should not be measured purely in monetary value but in its practical applications.
This paints quite a different picture from the climate of scepticism currently endemic in crypto circles. Solana’s decentralized apps, known as DApps, are measured by total value locked (TVL). Over 30 days, this grew by 5.5%. This helped it close the gap with Ethereum, the most used blockchain and cemented it as the second biggest blockchain by TVL. It also pips Ethereum when it comes to network fees generated. Solana bagged $246 million in monthly network fees. This was far more than Ethereum’s $133 million in the same time frame. There were plenty of apps that helped contribute to this, including Meteora, Jito, and Radium.
However, Solana’s blockchain is still not without its problems, and for it to flourish, these need to be resolved. There are still issues of scalability that impact all blockchains. The press regarding meme coins is also not helping Solana’s value. Despite it being useful for finance, AI, gaming, and a host of other applications, it is increasingly becoming aligned with meme coins and drops in their value. Instead of boosting the public perception of Solana, this could be having an adverse impact.
Economic factors impacting Solana
Of course, the whole crypto market has been impacted by the possible application of tariffs by the US. These have no direct impact on Solana, though they can impact investors and the wider economy, which does. So far, the landscape is hard to map. Tariffs were imminent, though deals have been struck to delay them for some countries. For others, it looks like a trade war will take hold. Inevitably, people look at what might be. A slowdown of the economy and rising inflation are two of the most discussed options. This leads to a sell-off of riskier assets, as has been seen in the last week.
There are also those who still buy crypto as a hedge against inflation. However, recent data suggests it is not the buffer it was once thought to be. It is more likely that if the economy worsens and prices go up, the value of crypto goes down, including Solana.
For those who are hedging their bets on altcoins, despite a gloomy market, there are many factors that could push the price up. As people stake their claims on crypto rising because it is accepted by traditional financial institutions, it has actually grown in value for the opposite reasons. The Solana blockchain is decentralized and designed to work against a TradFi system. This freedom is its strength, and while it will still mean volatility, it should be positive in the long term.
Finally, others are spelling doom for some of Solana’s main competitors, which could only be an advantage for the currency. Jason Pizzino, a cryptocurrency analyst, has warned that Sui, one of its rivals, is following worrying historic trends. This has been earmarked by an overbalance in time and price, which has led to its collapse. It is following in the footsteps of its April to August price actions of last year when its value more than halved.
Crucially, Solana has useful applications behind it. If these can be utilized, either in traditional finance or decentralized, then their value will rise naturally over time. Those wanting quick gains will have to ride the current wave of volatility. While impacted by current events, it also has a blockchain behind it. This in itself can protect it against some economic factors, making it both a risky crypto asset and one that can also work as a long-term hedge.
