Solana (SOL) overtook Cardano (ADA) and leading stablecoin tether (USDT) to become the fourth largest cryptocurrency by market capitalization.
At the time of going to press, the net worth of total SOL tokens in circulation was just over $ 76 billion, just behind the $ 109 billion from Binance Coin (BNB), $ 540 billion from Ether (ETH ) and $ 1.17 trillion of Bitcoin (BTC).
Meanwhile, Cardano and Tether’s market capitalizations were $ 66.39 billion and $ 74.42 billion, respectively.
The launch of a $ 100 million fund strengthens SOL’s bullish outlook
Solana’s market capitalization soared as its native token, SOL, climbed to another record high. On November 7, SOL price topped the $ 262 mark for the first time in history, largely due to a market-wide price rally in which other top cryptocurrencies posted similar gains.
Meanwhile, SOL received additional bullish signals from Solana’s advance into Web3 game development through its venture capital arm. The company, called Solana Ventures, announced on Friday that it will partner with FTX and Lightspeed Venture Partners to invest $ 100 million in the game studios and technology sectors.
In this way, Solana Ventures aims to attract desktop and mobile video game developers to build their projects on its public blockchain, increasing the prospect of greater SOL adoption. A similar adoption boom in 2021 helped increase the SOL price by nearly 17,500% YTD – from $ 1.51 to $ 262.45.
The upward trend emerged as speculators began treating Solana as one of the most serious challengers to Ethereum, the leading smart contracts platform struggling with higher gas fees and network congestion issues.
For example, Solana claims it could process 50,000-60,000 transactions per second (tps) for an average transaction fee of $ 0.00025. In comparison, Ethereum handles 15-30 tps, with median transaction costs ranging from $ 4 to $ 21.
Paul Veradittakit, a partner at Pantera Capital, told Bloomberg that he called Solana “the top competitor” for Ethereum, Cardano and other smart contract platforms in terms of “developer adoption and momentum.”
Similarly, Solana battles Cardano for top five as SOL market capitalization surpasses $ 70 billion
Nonetheless, Solana also showed signs of resource depletion, ie a lack of prioritization of SOL transactions and a lower number of validators, which resulted in an eighteen-hour network outage in September. If not resolved, it could increase the risk of reverse or altered transactions across the Solana network.
Correction risks for SOL price
Despite its recent rally to an all-time high, SOL risks a correction on at least two bearish indicators.
First, SOL price has formed a rising wedge, a technical pattern that usually results in lower prices. Second, the cryptocurrency has also confirmed a decreasing divergence between its rising price and weakening momentum (as confirmed by lower highs in its daily relative strength index).
A break below the wedge’s lower trendline when accompanied by an increase in volume would push SOL price down the maximum amount. So, SOL’s downside target is roughly somewhere between $ 205 and $ 91.52, depending on which level the bearish breakout begins.
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