Solana Coin Insights from Fundstrat which is an independent research company specializing in professional analysis of cryptocurrency.
Solana (SOL) is the native token for the Solana smart contract platform and its ecosystem of decentralized applications (dApps). Solana’s core differentiators from Ethereum are speed and cost. Transactions on the platform are both faster and cheaper than those on Ethereum due to Solana’s proof-of-stake consensus design and overall lower level of decentralization.
SCALABILITY FOR NEXT GEN APPLICATIONS
Solana is a smart contract platform that prioritizes scalability through fast and cheap transactions. Solana’s scalability is achieved through its Proof-of-Stake consensus mechanism, as well as an innovative transaction ordering system called Proof-of-History, which together allow the network to settle transactions nearly instantly for less than one cent at the current SOL price. The trade-off for greater scalability is less decentralization which is observable in the high technical requirements to operate a node, manual slashing process, and Proof-of-Stake consensus, which is inherently more centralized than Ethereum’s Proof-of-Work.TECHNICAL ANALYSIS AS OF 2.17.22
Solana appears to remain in short-term consolidation mode as part of an ongoing decline from last November’s peak. At present, further near-term pullbacks look possible to test January 2021 lows, but SOL seems to be gaining price support, and despite the ongoing negative trend, this is increasingly looking like a much better risk/reward.
Daily momentum indicators like MACD, RSI have begun to show some stabilization after $SOLUSD bottomed on 1/27/22, yet prices require more evidence of strength to argue that a meaningful low is in place at this time. Unfortunately, SOL lies only around 10% off the January lows, and has shown a weaker bounce off the lows than many other Layer 1 coins. Thus, its recent lagging will need to show evidence of holding support at $80.67 and turning back up above the ongoing downtrend before having some clearer suggestion that this is turning higher. Thus, key support lies at $80.67 while resistance lies at $122, an area that directly lines up with the ongoing downtrend from late 2021. When SOL can show some evidence of strengthening sufficiently to exceed this level, this would be the first meaningful technical positive that should allow for an intermediate-term uptrend to unfold. Initial upside resistance on breakouts lies at $149-$150, a strong initial Fibonacci retracement which also lines up with mid-December 2021 lows. Intermediate-term levels of importance lie at $170.82, then $192.
GROWTH DRIVERS
Solana’s high scalability has driven a significant quantity of developers into its ecosystem that aim to build applications for high throughput use-cases like media distribution, social networking, and financial markets. In 2021, the number of Solana ecosystem developers increased by 5x, representing the largest increase amongst similarly-sized smart contract platforms. Solana’s ecosystem is currently estimated to have about one thousand individual developers. In 2022, Solana is slated to be a hub for consumer-facing web3 applications that address many of the pain points experienced by developers, content creators, artists, and users in the legacy web2 ecosystem.
~ Fundstrat 2/17/22
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