Polkadot and Solana lead the altcoin rally, SOL price likely to double
- 78% of Solana’s circulating supply is staked, fueling a bullish narrative for SOL price.
- Solana ecosystem’s top five projects have over $1 billion in TVL each, driving higher utility for SOL.
- Using the Nakamoto Coefficient, Solana scores higher in decentralization than Bitcoin and Ethereum.
Solana, also popularly known as the “Ethereum-killer’, has emerged as one of the fastest-growing cryptocurrencies in the ecosystem. The altcoin move into NFTs has attracted capital rotation from Bitcoin and Ethereum onto the SOL ecosystem.
Analysts expect SOL to rally based on developments in the Solana network
Solana’s Ignition hackathon concluded with 568 new projects formed on the network’s blockchain. The new projects are expected to launch the next wave of cryptocurrency applications and web3 infrastructure on Solana.
Submissions for the IGNITION Hackathon are closed, with 568 projects formed
— Solana (@solana) October 18, 2021
Probably nothing https://t.co/TmZqEB8O5e pic.twitter.com/UUyaUvMZUy
While Solana’s total value locked (TVL) was $1 billion in late July; the ecosystem’s top 5 projects each have now over $1 billion in total value locked. The network has attracted several non-fungible token (NFT) projects and customized applications with varying degrees of rarity.
Matty Tay, head of growth at Solana, reflected on the growth of the top five projects on the SOL network in a recent tweet:
In late July, the entire @Solana DeFi ecosystem had $1 billion in TVL. Now, there are 5 individual projects each with over $1 billion in TVL.
— Matty Tay☀️ (@mattytay) October 14, 2021
Congrats to team @orca_so, along with @Saber_HQ, @SunnyAggregator, @RaydiumProtocol, and @ProjectSerum.
Up Only. https://t.co/j53hiLZigg
Analysts argue that Solana is not as decentralized as other cryptocurrencies in the top 10. The “Nakamoto coefficient” outlined by Balaji Srinivasan, former CTO of Coinbase, is used to estimate the decentralization of a blockchain network.
Using the Nakamoto Coefficient, higher scores correspond to higher levels of decentralization. When measuring Solana using the Nakamoto Coefficient, it scores higher than Bitcoin and Ethereum, contrary to popular belief.
Interestingly, 78% of Solana’s circulating supply is staked, based on data from Solana Beach, an SOL ecosystem statistics platform. Rise in the staked supply of SOL is fueling a bullish narrative for SOL price.
Pseudonymous cryptocurrency analyst @CanteringClark is bullish on SOL price and expects the altcoin to outperform the rest. He states:
There are so many reasons to have been long SOL to this point. Are you seeing the trend yet? Even on a day where Bitcoin is the main show, SOL is outperforming. Fast horse.
Elliot Laybourne, a cryptocurrency analyst, is bullish on SOL price for when capital rotation from BTC to altcoins begins. Polkadot and Solana were the top two cryptocurrencies leading the altcoin rally before Bitcoin started trading closer to an all-time high.
Laybourne shared his analysis in a recent tweet:
I'm liking the $SOL set-up for when capital rotates from BTC back into Alts pic.twitter.com/mBv8YQVA8D
— Elliott Laybourne (@fearfultrader) October 19, 2021
Laybourne was recently quoted:
As long as Solana remains above $85.00, I consider the structural bull market intact. Therefore, I expect to see buying on any dip towards $100. As long as Solana respects the rising trend channel, I maintain a long-term bullish price outlook.
FXStreet analysts have evaluated the SOL price trend and predicted that the altcoin is primed to hit a new all-time high at $225.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
