Solana Flips Cardano And Tether To Fourth Place, Hitting a New All-Time High

The Solana (SOL) reached another record high on Sunday as it reached $260.06, bringing its YTD gains up by roughly 17,500%. SOL surpassed Cardano (ADA) and Tether (USDT) to become the fourth-largest cryptocurrency with a market capitalization of $75.4 billion.

Solana Ventures announced Friday that it, alongside FTX and Lightspeed Venture Partners, would invest $100 million into the game studios and technology sector.

By attracting desktop and mobile video game developers to build their projects on its public blockchain, Solana Ventures intends to increase SOL adoption. With its recent rally, many are comparing it to the second largest crypto Ethereum.

“Solana is the leading Ethereum competitor,” Matt Hougan, chief investment officer at Bitwise Asset Management, said to CNBC. “I wouldn’t put all my chips on it, but I’m a big fan.”

Both ETH and SOL have smart contracts which are simply programs stored on a blockchain that run when predetermined conditions are met. They are important in running decentralized finance applications and NFTs.

“A lot of the fastest-growing applications of crypto technology have been built on Ethereum and rely on the Ethereum blockchain to function,” Hougan says. “If you’re investing in Solana, you’re betting that its technical sophistication will help it leapfrog Ethereum.”

Solana claims that it could process 50,000-60,000 transactions per second (tps) for an average transaction fee of $0.00025. In comparison, Ethereum transacts 15-30 tps, with its median transaction cost ranging between $4 and $21.

Paul Veradittakit, a partner at Pantera Capital, called Solana "the top competition" to Ethereum, Cardano, and other smart contract platforms.

NFT industry data aggregator CryptoSlam ranks Solana as the fourth-best NFT blockchain behind Ethereum, Ronin, and Wax by 24-hour sales volume. The data shows that Solana saw a record month for secondary NFT sales volume during September with a total of $189.4 million. Secondary sales volume for Solana-based NFTs has reached almost $500 million since the start of August.

Messari research analyst Mason Nystrom said that Solana has grown to be one of the top NFT blockchains in just a few months. He also noted that as of November 1, Solana’s NFT secondary sales reached $500 million in just three months.

However, SOL has risks of a correction due to at least two bearish indicators. 

The SOL price has been forming a Rising Wedge, a technical pattern that typically results in lower prices. And it has also been confirming a bearish divergence between its rising price and declining momentum (as confirmed by lower highs on its daily relative strength index).

If accompanied by an increase in volume, a break below the Wedge's lower trendline would risk sending the SOL price lower by as much as the maximum height. It will put SOL's downside target to levels between $205 and $91.52.

By Amy Liu

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