The price of Solana has risen by 12.46% in the last 24 hours, returning to the $12 mark.
After FTX and Alameda Research collapsed, SOL fell rapidly from $35 to below double figures.
The current rally coincides with Vitalik Buterin’s recent tweet for Solana.
Community members have high hopes for Solana going forward.
In what seems like a cease on selling pressure, Solana has soared by 12% in the last 24 hours, returning to the $12 price mark, according to market data from Coinmarketcap. The recent increase comes after a massive decline to below-double figures.
The sudden rally coincides with the recent tweet of Ethereum founder Vitalik Buterin on Dec. 30. In the tweet, he heaped praises on Solana and hoped that the ecosystem would get a chance to thrive.
Buterin described the downturn in the price of SOL as the washing out of “awful opportunistic money people.”
Some smart people tell me there is an earnest smart developer community in Solana, and now that the awful opportunistic money people have been washed out, the chain has a bright future.
Hard for me to tell from outside, but I hope the community gets its fair chance to thrive
— vitalik.eth (@VitalikButerin) December 29, 2022
After the prominent developer made the predictions, SOL embarked on a price rally as it walked a recovery path. Solana experienced a spike in active addresses on January 1, when other major blockchains like Ethereum, Polygon, and Cardano experienced slowdowns.
MAJOR BLOCKCHAIN ACTIVE ADDRESSES
On January 1st of 2023, Solana saw an increase of active addresses while Ethereum, Polygon, Cardano and other blockchains experienced a slowdown.
This move is related to the recent move in $SOL, the Bonk craze and the NFT boom. pic.twitter.com/jwDf651M80
— Step Data Insights (@StepDataInsight) January 2, 2023
Solana’s market cap climbed from its seven-day low of $3.04 billion to $4.60 billion at press time.
Despite 2022 being a poor year for Solana, its co-founder Raj Gokal believes it washed out some bad actors and made the ecosystem more decentralized.
past couple years, solana’s otherwise passionate community was infected mercenaries and grifters. like a bad virus, they needed to be killed.
fevers are painful, but you’re glad when they break quickly.
every bad actor washing out of this ecosystem makes it more decentralized.
— raj (@rajgokal) December 29, 2022
There are high hopes for Solana moving forward among some community members.
Nothing is more important than sticking by your community in times of strife. Don’t get me wrong. You need to keep your business alive. You need to create value. But it doesn’t matter if you made the right bet, if you do it alone. What we do, we do together.
— Mad Armani (@armaniferrante) December 30, 2022
I see the #Solana community with similar energy to what #Ethereum had in 2018-20
Convicted new settlers on a digital frontier, optimistic about the future!
But I just can’t see the investment case for $SOL. Solana has some massive headwinds; I can’t see how it overcomes them
— DavidHoffman.bedrock (@TrustlessState) December 30, 2022
What Led to the Recent Downturn?
Following the collapse of FTX and Alameda Research, SOL fell rapidly from $35 to below double figures in less than a month. SOL declined because FTX and Alameda Research are the two most prominent coin holders. The crisis resulted in the liquidation of a substantial part of FTX and Alameda Research’s SOL holdings.
Selling pressure mounted on the price of SOL, triggering a free fall.
Major projects in the ecosystem recently announced their intentions to leave Solana, contributing to the decline. Top projects like DeGods and y00ts have announced their plans to migrate to Ethereum and Polygon, respectively.
Vitalik Buterin’s tweet has breathed life into the token.
On the Flipside
While the Solana ecosystem had a bad year, the number of transactions processed by Solana was significantly higher than any other blockchain.
.@solana processes substantially more transactions than any other blockchain. pic.twitter.com/Q334qweHrV
— Delphi Digital (@Delphi_Digital) January 1, 2023
Why You Should Care
At the beginning of the year, it was thought that Solana would do well among the Layer-2 blockchains. Nonetheless, the Solana ecosystem suffered as a result of the FTX crisis and the bear market of 2022. Despite this, recent price hikes may give the Solana community hope for a brighter 2023.
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The Great Solana (SOL) Migration: Why is Solana Dropping and Why Are Projects Moving to Other Chains?
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