Solana (SOL), one of the fastest-growing cryptocurrencies in the market, has caught the eye of Arthur Hayes, the co-founder of BitMEX and the CIO of MaelstromFund. Hayes recently expressed his confidence in Solana’s potential on X, a social media platform. His bullish remarks came as SOL bounced back from a dip below $90 to above $100, showing its resilience amid market volatility.
Solana, which claims to be the world’s fastest blockchain, has been on a remarkable run in the past year, rising from less than $2 to over $200 at its peak in Sept 2023. The coin has since corrected over 50% but has found strong support around $90. Notably, a crypto news outlet and some analysts have identified a bullish pattern on the SOL chart, suggesting a possible breakout to $163 if it can clear the $110 resistance level.
As per CoinStats, a crypto data provider, a surge in demand has boosted Solana’s price performance, resulting in an 11.91% increase from its intra-day low in the last 24 hours. SOL traded at $102.15 when writing, ranking seventh among the top cryptocurrencies by market capitalization.
Solana Faces Competition From Bitcoin & Ethereum
Despite Solana’s impressive growth, it still faces stiff competition from the two leading cryptocurrencies, Bitcoin and Ethereum. A recent report by CoinShares, a digital asset manager, revealed that Solana saw net outflows of $5.3 million in the last week of October 2023, while Bitcoin attracted inflows of $113 million, mainly driven by the anticipation of a spot ETF approval in the US. The report also noted that 55% of the Bitcoin inflows came from US-based exchanges, indicating a strong interest from American investors.
Ethereum, the second-largest cryptocurrency and the dominant innovative contract platform, also poses a challenge to Solana, which aims to offer faster and cheaper transactions. Ethereum is undergoing a significant upgrade to improve its scalability and security, which could attract more users and developers to its network. However, Solana has an edge over Ethereum in its high throughput and low fees, which could appeal to those who value speed and efficiency.
Solana users can earn rewards and support the network by staking their tokens to validators responsible for processing transactions and securing the blockchain. Staking is a common feature of many proof-of-stake protocols, incentivizing users to lock up their tokens and participate in network governance.
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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.
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