The 14th largest cryptocurrency by market cap jumped by more than 55% after bottoming out at $20.14 on Tuesday.
An overnight bounce across the cryptocurrency assets this Wednesday saw Solana (SOL) outpacing its top rivals, including Bitcoin (BTC) and Ether (ETH).
The SOL/USD exchange rate surged 55.10% to $31.58 on Wednesday after bottoming out at $20.14 in the previous session. Its move uphill came in the wake of an overall crypto market retracement that, in turn, followed a brutal crash in response to a full-fledged crypto ban in China.
Solana was among the loss-bearers at the beginning of this week. SOL/USD plunged by more than 42% after opening Monday at $35.22. Similarly, Bitcoin lost 19.07% in the same period while Ether, the second-largest cryptocurrency and Solana’s blockchain rival, dipped 24.75%.
But all the top crypto tokens ticked back after 48 hours of dizziness. Bitcoin bounced 19.44% to $34,400 from its sessional low of $28,800. Meanwhile, Ethereum rebounded by up to 20.29% to $2,045 after testing $1,700 as support, albeit much lesser than Solana.
And so it appears, Solana had enough catalysts supporting its wilder recovery move in the late Tuesday and early Wednesday sessions. The three of them are listed as follows.
An institutional handshake
Solana attracting higher bids during the late Tuesday recovery session coincided with the announcement that Pyth, a decentralized financial market data distribution network, has added LMAX Digital, an institutional exchange operator, as its data provider.
We are thrilled to announce @LMAX, the leading independent operator of institutional execution venues for FX and cryptocurrency trading, as the first institutional exchange joining @PythNetwork as a data provider!
Read more at: https://t.co/7s8kYc6emE pic.twitter.com/zfDGuXBDNK
— Pyth (@PythNetwork) June 22, 2021
In detail, Pyth Network operates atop Solana’s public base-layer, proof-of-stake blockchain protocol that is optimized for scalability. Solana proposes to assist developers in creating decentralized applications (dApps) without having to design around performance bottlenecks.
As for SOL, the token serves as a native currency within the Solana ecosystem. Users stake their SOL holdings directly on the network or delegate them to an active validator. In return, stakers are promised to be given inflation rewards. The feature will go live alongside Solana’s Full Mainnet release.
Users can use SOL to pay for transaction and smart contracts fees.
Following its partnership with LMAX, Solana-backed Pyth would receive foreign exchange and cryptocurrency trading data on its blockchain. In turn, the oracle network work would feed the institutional data to decentralized finance projects.
Strategical investments (inbound-outbound)
Solana has raised almost $26M via the sales of its SOL tokens to this date.
But the blockchain protocol itself led a funding round for PARISIQ, a blockchain data monitoring platform, to raise $3M at the end of last week. According to Solana founder Anatoly Yakovenko, having PARISIQ on board would give their projects “fewer headaches” as they build out their stack.
Rumors that Solana would raise another $450M to develop an ‘Ethereum Killer’ might also have kept SOL’s upside bias intact despite the June 22 crash. However, the Solana team did not confirm the report. But they didn’t deny it either.
At the time of the PARSIQ announcement, on June 16, SOL/USD was trading flat. But the China crypto ban news shook up its stable sentiment. The pair’s recent major declines apprehensively appeared out of FUDs (fear, uncertainty, and doubt). But based on mergers alone, the Solana ecosystem has emerged as a blockchain powerhouse.
In May, for instance, Solana allotted $20mm to support projects on its network with additional assistance from MATH Global. The team also raised $60mm to support blockchain-enabled projects in Brazil, Russia, India, and Ukraine.
Related: Bitcoin price ‘very near bottom’ with $30K dip, says bullish institutional report
Solana also partnered with ROK Capital to launch a $20mm fund to expand in South Korea.
SOL’s latest move downhill also had it test a triple-support confluence, providing daytraders psychological entry levels in addition to Solana’s development as a blockchain project.
The yellow bar in the chart above offered the first layer of price support, given its ability to cap downside attempts in recent history. Second, SOL received an additional bullish floors from the red horizontal line at $24.56, also with a history of keeping the Solana token’s upside bias intact, and the 200-day simple moving average (200-day SMA; the saffron wave).
The SOL/USD’s relative strength index (RSI was also marginally above its oversold threshold of 30. Traditionally, traders perceive a lower RSI reading as their cue to enter the market.
Yes, number go up.
More likely, given prior performance after price action like yesterday, $SOL has become a defacto buy the dip asset among many traders.
— Hsaka (@HsakaTrades) June 23, 2021