Solana Price Rises From Weekly Low; Is $90 SOL Feasible?
Solana's price has made a recovery amidst a broader market correction, and it's essential to explore the reasons behind this resurgence.
On January 17, Solana's token faced significant resistance around the $102 mark, leading to a notable correction of 23%, resulting in a 5-week low at $78.60 by January 23. However, the market dynamics shifted as SOL experienced a swift 10% rebound within 24 hours, providing a temporary halt to the bearish trend. Traders are now assessing the underpinnings of this recovery and contemplating whether SOL can reclaim levels beyond $90.
A notable factor contributing to this market movement is the introduction of token extensions on the Solana network. These extensions bring features such as confidential transfers for balance privacy, transfer hooks for controlled access, and the capability to impose fees at the protocol level. These enhancements were incorporated in the v.1.17 release of the Solana Labs validator client, announced on January 19. These plug-and-play functionalities are strategically crafted for enterprise applications and aim to provide resources that align with regulatory standards.
Updates to The Solana System Give Priority to Reliability and Speed
Solana's positive outlook extends with the development of Firedancer, a promising third-party validator client by Jump Crypto. This initiative aims to elevate Solana's processing capabilities to handle millions of transactions per second and introduce support for parallel processing through sharding. An X social network post by user @R89Capital underscores the improved stability of the Solana network, highlighting a shift from multiple failures experienced in 2022. In contrast, Solana maintained consistent performance throughout 2023, outperforming some competitors, including Ethereum layer-2 scaling solutions, which grappled with outages amid increased demand for blockchain services.
The year 2023 saw the successful launch of Solana SPL token airdrops on centralized exchanges, featuring projects like Jito's (JTO) staking solution and the BONK memecoin in December. This wave of airdrops triggered a surge in demand for SOL tokens, as users eagerly participated in speculative airdrop opportunities. Social network discussions surrounding Solana airdrops indicate a high level of investor interest, contributing to increased demand for SOL. While the outcome of these speculations remains uncertain, the anticipation alone stimulates demand for SOL and boosts overall activity on the Solana network.
The recent bounce in SOL's price to $80 prompts questions about whether it solely reflects the heightened interest in airdrops and the introduction of token extensions. This momentum could wane after the initial excitement. However, the sustained demand in Solana network's DApps activity instills confidence that the path to surpassing $90 is viable.
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