Solana Is the Fourth Largest Cryptocurrency by Capitalisation. But for How Long?

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2023 turned out to be a good year for cryptocurrencies, especially given the depressing mood that reigned at the end of 2022.

From the beginning of 2023:

  • Bitcoin increased in price by more than 150% – including due to rumours related to the approval of applications for a Bitcoin ETF;
  • Ethereum rose by approximately 85%.

But what has been particularly impressive is the progress made by the Solana project. This is a decentralised blockchain platform, which is characterised by high speed and scalability — they are achieved through the use of a unique architecture based on the Proof-of-History (PoH) protocol. In 2023, Solana became the first blockchain platform to reach 50,000 transactions per second. And a number of large investment funds, such as Grayscale and CoinShares, have added SOL to their portfolios.

SOL is a token that is used to pay for transactions and services on the Solana platform. It can also be used for staking to help support the network. The SOL/USD rate in 2023 has increased by more than 1000%!

At the same time, SOL now ranks 4th in terms of capitalisation of cryptocurrencies — after BTC, ETH, and the USDT stablecoin. December was the month when the price of the SOL token exceeded the psychological level of USD 100 for the first time since April 2022 (the historical high reached in the fall of 2021 exceeds the USD 250 level for SOL).

But will the price be able to stay above USD 100?

The 4-hour chart on the FXOpen TickTrader platform shows that:

  • the price broke through the USD 100 level, but did not test it;
  • the price broke through the level of USD 110, which confirmed its role as support;
  • the price reached the upper limit of the ascending channel, which began in early November.

At the same time, the chart shows bearish signs:

  • the price sharply reversed from the upper border of the channel on the last closed candle;
  • divergences formed on the RSI indicator.

In such a situation, you should be prepared for a scenario in which the SOL/USD price may fall — for example, to test the USD 100 level. In this case, the market can be supported by the median line of the channel.