Traders push their SOL/USD bids higher after Solana teases the community with "ignition," a mysterious feature that will go live on Aug. 31.  

Solana (SOL) prices rose on Aug. 30 as traders speculated on what appeared to be a key but mysterious feature launch later this week.

The SOL/USD exchange rate climbed to a new record high of $103.06 following a 9.35% intraday rally. The upside move surfaced days after Solana introduced "Ignition" on their official media handles. However, the team provided little details about the tool but prompted the community to guess that it would be about burning SOL tokens.

The speculation surfaced majorly because of Solana's Ignition teaser video, which featured a purple flamed lighter.

Ignition might not be a SOL token burning event

As a public blockchain, Solana relies on SOL to aid two primary tasks: Staking and Transaction Fee. The protocol burns a portion of the transaction fees it collects to keep the SOL supply limited against its 500,000,000 SOL issuance.

However, Solana also creates new tokens based on a "dis-inflationary inflation schedule," wherein the SOL issuance rate decreases periodically after starting at its highest value. Meanwhile, Solana claims that the supply would eventually stabilize at a "predetermined long-term inflation rate."

But if Ignition is a token burn event, it should not deserve a dedicated landing page on the official Solana website. That is primarily because of the protocol's previous SOL burning events that did not see specialized teasers from the Solana team.

Moreover, the Ignition teaser comes with a caption that reads, "The sky’s the limit. What will you launch," with a period Aug.t 31 - Oct. 8, underlining that it could be more an event for decentralized app developers or non-fungible tokens (NFT) creators, and less a token burning episode.

Chart

Snapshot from Solana's official Reddit community page concerning Ignition. Source: Reddit

But overall, traders appear to have found Ignition as a catalyst to keep their SOL bids higher. On the day of the announcement, which was Friday last week, the SOL/USD exchange rate jumped 17.62%. The next day, the pair climbed another 9.2%.

Nonetheless, the rally slowed down on Sunday just ahead of hitting the $100-mark, falling over 1.5%. But it resumed the upside heading into the new week, claiming $100 as top digital assets, including Bitcoin (BTC) and Ether (ETH), dropped.

Chart

SOL/USD daily chart. Source: TradingView.com

SOL later dropped back below $100 on profit-taking sentiment.

Overvaluation risks persist

The Solana prices earlier started rallying in the wake of an overall crypto rebound after Bitcoin bottomed out below $30,000 on July 20. Later, SOL/USD picked additional upside momentum on a flurry of optimistic fundamentals, including digital asset manager Osprey Fund's decision to launch a Solana-dedicated fund for institutional investors.

Last week, real-time data feeder Pyth Network announced going live on Solana's proof-of-stake blockchain via its cross-chain communication tool, dubbed Wormhole.

And before that, Solana also forayed successfully in the NFT sector mid-August with the launch of Degenerate Apes—the project sold out 10,000 pictures of comic apes in just eight minutes and raked in 96,000 SOL in volumes (over $5.9 million at that time).

On the flip side, Solana's 369% price boom from its July 20 low of $21.96 turned SOL excessively overvalued, as per its current relative strength index reading (near 81). That amounted to a short-term correction in the sessions ahead.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision. 

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto bulls on winning streak pushing for more

Bitcoin price jumped this week after a shift in sentiment on Thursday when global equities went back in the green and investors favored riskier assets like cryptocurrencies. 

More Bitcoin News

Binance support for Polkadot parachain auctions could send DOT to new all-time high

At the Sub0 Conference representatives of Parity Technologies, DOT founders Gavin Wood and Robert Habermeier, confirmed that Polkadot is now ready to implement parachains, auctions and crowd loans on its blockchain network. 

More Polkadot News

XRP price awaits for volume to skyrocket to $2

A brief technical and on-chain analysis on XRP price. Here, FXStreet's analysts evaluate how Ripple bulls take control.

More Ripple News

Shiba Inu whales buy the dip after SHIB loses $600 million in market cap

Shiba Inu concluded a massive rally, and SHIB price plunged on October 14. Proponents were awaiting a Dogecoin flippening, however, SHIB dropped to 14th rank by market capitalization soon after. 

More Shiba Inu News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP