Solana price on verge of explosion as users stake over 76% of circulating supply
- Over 76% of Solana’s tokens are staked, reducing the circulating supply of SOL across exchanges.
- Solana price is currently in a downtrend due to the sudden 18-hour network congestion on Thursday.
- Analysts are bullish on Solana, predicting that the SOL price could make a comeback above $200 before a massive rally begins.
As average transaction fees on the Ethereum network hit a high of $48.33, there was a spike in on-chain activity on the Solana network. According to data from Staking Rewards, over 76% of Solana tokens worth $84 billion have been staked by users in exchange for high-yield interest payments.
Solana prepares for a comeback above $200
A rise in staking on the Solana network has reduced the circulating supply of SOL. Historically, a shortage of the asset’s tokens fuels a bullish narrative for price. Analysts expect the SOL price to recover from a drop below $200 and make a comeback within a week.
The Solana network suffered network congestion on Thursday, and the crypto community criticized the Ethereum-killer for lack of centralization and transparency. After an 18-hour downtime, the Solana network is yet to state the cause of the congestion.
Solana’s on-chain activity has increased as developers and users from the Ethereum network rotate capital into SOL for cheaper transaction fees. Solana has emerged as the top choice in the DeFi ecosystem.
The altcoin, popular as an Ethereum-killer, is currently downtrend, trading at $178.78. @Crypto_Ed_NL, a cryptocurrency analyst, is not convinced that the correction is complete.
$SOL
— Crypto_Ed_NL (@Crypto_Ed_NL) December 9, 2021
Missed the green box by a hair in the dump last friday/saturday but not out of the woods yet imo.
Want to see a clean break out from that pennant before I consider the correction to be finished pic.twitter.com/XqUWNYV4Hg
Tyler Hill, a cryptocurrency analyst and YouTuber, expects Solana price to explode. Hill says, “December 15 is the last day that we have to push back above 200 in order for us to see this key level of support hold again, as it has multiple times last year. If we see a break to the downside within a week, we could see this level push us back in an uptrend.”
FXStreet analysts have evaluated the Solana price trend and predicted an upswing to $240 after a dip.
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.
