Sol coin market cap

The Solana price moved up over 10% in a strong bounce despite the bearish price action on Bitcoin and Ethereum this week.

Is this just a dead cat bounce and a brief fakeout before more continuation to the downside? Or is SOL a good buy now before the next bull run?

Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.

Why Invest in SOL?

Created in 2017, Solana is an open-source project that is designed to facilitate cheap, fast, transactions for smart contracts and decentralized applications (dApps). The cryptocurrency native to the Solana network is called SOL and currently trades for $30.75.

What makes Solana different from other cryptocurrencies is its speed. It uses a hybrid conscious mechanism to verify transactions at blistering speeds, giving Solana a theoretical throughput of 710,000 transactions per second.

With massively increased interest in cryptocurrency and dApps, the need for a network that can handle a high volume of transactions cheaply is ever more important, making Solana a potentially valuable solution.

Solana Price Now – Is SOL a Buy

Solana price

Solana price chart

SOL has had an interesting history in terms of price. With the NFT boom, the need for fast, low-cost transactions became ever more apparent. This led SOL to undergo a huge run and SOL pumped from around $25 all the way to $250. This milestone meant SOL increased in value by a multiple of 10 in just four months.

However, following one of the best runs of 2021, SOL came crashing down alongside the rest of the cryptocurrency market.

Between November ‘21 and January ‘22, SOL crashed by 30%, dropping from $250 to just $175. However, this wasn’t the end for SOL. With the collapse of financial markets across the globe worsened by inflation hikes and war, SOL soon found itself trading for just $80.

Despite brief bullish momentum in April ‘22 taking SOL back toward the $140 region, things once again turned sour and SOL began its descent to the $30 region where we’re at today. Despite SOL pumping by 17% over the past day, much of these gains have reversed and the bullish move halted.

Is this the Bottom for SOL?

With BTC hitting prices not seen since 2020, many investors are speculating that the worst is over and that the market has reached its bottom. However, with inflation at the highest levels since 1981, it’s clear that we’re not in a regular market cycle.

The cryptocurrency market is driven by the stock market, which itself is inversely correlated with the U.S dollar index (DXY). Despite SOL pumping, considering that the DXY is also at its highest level since May ‘20 it seems logical that we could still have further to drop.

DXY

DXY price chart

Ultimately, every financial market is driven by supply and demand. When people don’t have the funds to invest in speculative assets and demand drops, it’s only natural for prices to follow. We might not be at the bottom just yet, but don’t worry bluer skies are on the horizon.

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