Investors are shocked about Solana’s 250 percent rally and the altcoin is likely to touch the $30 mark soon. But analysts have sounded cautious about Solana’s downside risk in the event that the uptrend fails.
SOL price is currently cooling down. It is trading at $23.04, as per data from CoinMarketCap, as it dipped 7.20% in the last 24 hours. Solana gained 140% since January 1. With the bulls still in play, the altcoin is likely to see more highs. SOL’s 8-day exponential moving average (EMA) continues to support the ascending rally which is hovering just below the current price. The altcoin’s relative strength index (RSI) suggests that the current rally is coming down from overbought conditions.
Data charts highlight that the majority of the traders are on the short side. This is an opportunity for buyers to run their stops. SOL’s current price action can evolve into a medium-to-long-term bullish trend, that is, if enough buyers are interested in joining the bullish move. But market analysis shows weakness, which will likely cause a steep correction in Solana’s price.
In terms of NFT trading across blockchain platforms, Solana ranks second. Ethereum boasts the lion’s share of 81.6% of the total NFT trading volume. Solana, with 11.6% share, is the second biggest pie. The Solana network sustained a setback when two of the largest projects in DeGods and y00ts moved away. This set a bad precedent for product developers wanting to launch non-fungible tokens. The Ethereum network, to date, remains the go-to choice for big brands and community projects.
Polygon has also recorded an increase after collaborating with brands like Reddit, Meta, and Starbucks. DeGods moved to Polygon when the project received a $3 million grant from Polygon Labs. Moreover, usage data from Nansen for Polygon and Solana highlights the diversion where the number of active users on Polygon is surging, while Solana’s usage is on a downtrend.
Frequent and lengthy network outages and hacks made Solana’s network unpopular in 2022. Solana had more than five outages.
