The crash of the promising Solana project and the stagnation of bitcoin and Ethereum make players invest in the assets from the second ten in terms of capitalization. But they may still return to SOL.
The Solana (SOL) platform’s token has started to grow rapidly since the beginning of August. On August 3, its price was $32.9, according to Coinmarketcap, and reached $214.96 on September 9, an increase of 6.5 times. But on Tuesday last week, the Solana blockchain suddenly stopped processing transactions. Blocks were not added for 16 hours. And even after the network was alive again, the negative effect continued to affect until the end of the week. SOL slipped to $136 last Friday.
Some traders have taken advantage of the crash to buy low. But funds put themselves on guard and stopped pouring money into Solana. Perhaps some of them have shifted to other cryptoassets. Institutions do not like to take risks; highly likely they have returned to bitcoin. But there are also those who decided to take a closer look at coins from the second ten in terms of capitalization. This explains the growth of Avalanche (AVAX) and Cosmos (ATOM). In these projects, innovative solutions are implemented.
Avalanche proclaims itself the fastest blockchain for smart contracts: “Avalanche is blazingly fast, low cost, and green.” The mainnet was launched a year ago, to attract developers, two bridges (Avalanche Bridges) have already been developed to the Ethereum blockchain. After the launch of a new version of the bridge a month ago, the Good Bridging (GB) DeFi project was also developed to transfer ETH to the Avalanche network, backed by a profitable airdrop.
Cosmos (ATOM) tries to solve the problem of scaling slow blockchains like the bitcoin blockchain by connecting them with the fast Proof-of-Stake blockchains. Cosmos is also intended to attract DeFi developers by making it easier to use the blockchain infrastructure.
In turn, Solana has been attracting investors since the beginning of the year with its high yield. SOL growth during this time was 14,000%. Since the market crash in May, SOL has grown by more than 800%, from a price of $26. Investors, including institutional ones, believed that Solana could compete with Ethereum. Functionally, the Solana blockchain has better performance. But it is important for institutionals, that the Ethereum community of developers is much larger than that of Solana. And the failure in the Solana blockchain has sowed doubts among the funds.
However, a 40% SOL collapse could be a good long entry opportunity. According to traders, the growth potential of Solana is big. Proponents of technical analysis, using the Fibonacci retracement levels, determine two resistance levels in the case of SOL increase, 10% and 25% of the current price, that is, $155 and $175.
This was expressed on the traders’ social network, TradingView. However, there are also opponents of this forecast, they point to the fact that the share of bitcoin in the market since September 9 has begun to rise again from 40.79% to the current level of over 42%. Typically, when Bitcoin Dominance rises, altcoins are consolidated.