The crypto market has faced severe straits in the past month following a major sell-off. Several altcoins have also followed suit, with many shedding double-digits of their profits. However, outliers are popping up as the emerging asset class begins to enjoy much-needed bullish activities.
One that has piqued investors’ interest is Solana, which recently posted double-digit gains at the opening of the market. SOL is up 17%, boosting investors’ confidence for a likely comeback.
In tandem, the crypto market has followed suit with a strong 5% increase back to $930 billion in total value locked (TVL). Several investors are wondering if this represents a return to profit. Could this be a great time to buy SOL? Let’s find out!
Fed’s New Inflation Figures Boost Crypto
The crypto market endured a difficult May following a market-wide dip. The spiral effect has since led to a drop below the $1 trillion peg. Terra blockchain’s fiasco and the stock market’s poor performance are the culprits.
The ongoing Russia- Ukraine war has seen inflation figures triple and the US Federal Reserve (popularly called Fed) has posted even more dire results. According to its Chairman Jerome Powell, the top US financial agency will be raising its inflation benchmark rate to 0.75% – the highest since 1994. The Federal Reserve hopes this will help slow the fast-moving train of inflation by slowing down the economy.
Inflation figures have continued to climb since the beginning of the Covid-19 pandemic which grounded the global financial economy. The US has borne the brunt of the financial dearth with inflation figures surging to 8.6% in May, representing the fastest clip since 1981.
The numbers are not expected to tone down anytime soon and investors are already exploring multiple ways to conserve their wealth.
The crypto space and principal player, Bitcoin, offers one way. The blockchain recently recorded decent gains, rising north of the $21,000 price peg.
Altcoins have also tapped into this bullish wave with the overall industry flipping green. Monthly losses have also shrunk. The technicals of SOL flipped from a ‘Strong Sell’ to a more moderate ‘Sell’. This likely points to growing investor confidence in the digital asset.
Fee Model up for Proposal
The Solana blockchain became a blockchain star in 2021 due to its high throughput and low fees. However, its less than $1 transaction cost was a huge draw given that the principal decentralised applications (dApps) network Ethereum was way more expensive.
Despite this, the Solana blockchain is currently reviewing its fee model. The blockchain fee structure operates in a way that the user with the highest bid gets to be at the front of the transaction queue regardless of who made the first call.
However, Solana co-founder Yakovenko is planning a change to this model. In a recent tweet, Yakovenko, going with the Twitter display name ‘TolyxNFT’, pointed out the adverse impact of this model on other bidders.
ELI5 solana fees:
Once all the features rollout, there will be fees. Does that mean the network will be expensive? No! https://t.co/vWfJxYXjiK
— T◎lyxNFT, (@aeyakovenko) June 16, 2022
To effect a solution, the blockchain developer announced, in a Github repository, that all transactions should be filled into account buckets and passed on rapidly to the next validator to ensure accounts are not starved on forwards. This ensures everyone gets answered promptly, not minding who first placed the order and how much they are willing to pay in transaction fees.
SOL Coming to Robinhood Customers
SOL trading is expected to become even more popular in the coming weeks. According to a recent tweet by a zero-commission online brokerage firm, Robinhood, it is currently working on listing the SOL token among the crypto assets its users can speculate on.
Despite a controversial 2021 following the GameStop trading debacle, Robinhood remains a top destination for US investors. The multi-asset broker currently offers its services to 31 million users, with a growing number of investors leaning into its zero-fee crypto trading offering.
Some good news @solana https://t.co/Jow0sHJ3AF
— Robinhood (@RobinhoodApp) June 15, 2022
An expansion into the Robinhood platform could do good things for the SOL price.
Strong investor interest is expected to pick up if this happens, and now may be a great time to buy Solana.
Conclusion – Technical Analysis
At press time, SOL is trading at $32.62, reflecting a 17% increase since the beginning of the day. However, the digital asset has not fared too well in the monthly chart as SOL has shed 41.45% so far.
Its relative strength index (RSI) figure of 52.61 shows that SOL is trading in the underbought region with its moving average convergence and divergence (MACD) indicating a strong buy signal for investors looking to invest in cryptocurrency.
SOL has been trading sideways for the most part, with resistance visible at the $35 price peg in the past month. The digital asset’s price has only been able to make higher lows following a broader market consolidation.
Cryptoassets are a highly volatile unregulated investment product.
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