Solana’s Performance and Challenges in Q2 2023
Despite facing turbulence over the past six months, Solana remains a top-10 asset by market cap in the cryptocurrency sphere. Dubbed the “Ethereum killer” by some of its supporters, Solana has shown resilience in the face of challenges.
Heading into 2023, SOL was trading around the $10-support zone, facing a downtrend since November 2021 when it was trading at $200. However, a shift in sentiment towards bullishness in January, with Bitcoin climbing past $17k, led to Solana recording gains of 175% in 21 days. Nevertheless, it was not able to breach the $26-$28 resistance zone, which has acted as support in the past.
FTX, where the freefall began
A major blow to investor confidence in Solana came from FTX, one of the largest crypto-exchanges, whose CEO, Sam Bankman-Fried, was a vocal proponent of the Solana network. However, the SEC has charged Mr. Bankman-Fried with defrauding equity investors of FTX, alleging commingling of customer funds with Alameda’s for undisclosed venture investments. This has led to a decline in Solana’s reputation, and the foundation sold a significant amount of SOL to FTX Trading and Alameda Research, causing a nosedive in SOL’s price in November 2022, declining by 45% from November 11 to December 31.
SOL’s Rally in January and February 2023
Despite the challenges, Solana experienced a rally in January and February 2023, gaining 179.88% on the price charts and rallying from $9.69 to $27.12. This rally has been partly attributed to the introduction of Bonk, a meme coin within the Solana ecosystem, which was airdropped into users’ wallets in December. The transaction count per day, which had been on a downtrend in December, began to pick up pace in early January, and the introduction of the meme coin helped improve community sentiment.
Network Outages and Investor Confidence
However, Solana has faced repeated network outages in recent months, which could shake investor confidence. ChatGPT agrees that the network issues may pose challenges for Solana in Q2 2023.
