Solana blockchain’s native asset, SOL, soared to a new record high on Monday.
The SOL/USD exchange rate rose by 26.12% to $65.467 on the Binance exchange after traders assessed a flurry of infrastructural developments in the Solana ecosystem, including a recent $70-million crowdfund to support its blockchain-powered decentralized exchange, Mango Markets.
Solana ecosystem upgrades
Mango offers a platform for spot markets, lending and perpetual futures. It sources liquidity from its native pools and Serum, another Solana blockchain-based exchange, which is backed by billionaire Sam Bankman-Fried’s FTX.
The working model is very similar to other successful, Ethereum-based decentralized exchanges such as Uniswap and SushiSwap.
I don’t think you guys realize how bullish @mangomarkets really is50% of all USDC on Solana $SOL was on @mangomarkets token sale, Sam has his hands all over this$MCAPS is my play because of the low supply (below 475) and this is basically a bet on Mango with a better reward % https://t.co/gSJaLn1QPC pic.twitter.com/aI6nnr9UR9
— LilMoonLambo (@LilMoonLambo) August 11, 2021
Other optimistic updates involved the Aug. 9 launch of Wormhole, a communication protocol between Solana and other top decentralized finance projects, including Terra, Ethereum and Binance Smart Chain, and the SOL-powered sales of the Degenerate Ape Project’s 10,000 nonfungible tokens (NFT) over the weekend.
“The very first day has already had over 200k SOL traded not even 24 hours in,” market analyst Pentoshi tweeted on the NFT sale on Solana marketplace Solanart.
“There are barely any notable NFT projects if any on SOL, but what happens as the market begins to shift? The demand for SOL will drive prices up to new highs and looking at the chart it’s primed for price discovery.”
In conclusion. The FA+ TA is setting up for an explosive price discovery opportunity to trade and one that can be fueled by NFT’s and projects launching on SOL. It’s ready imo and a no brainer. Imo the most bullish asset in the space right now. Make the switch before the crowd. pic.twitter.com/RfcEVVV54B
— Pentoshi Wont DM You (@Pentosh1) August 15, 2021
Crypto market influence
The latest bull run in the Solana market also appeared as gains in top cryptocurrencies slowed down.
Both Bitcoin (BTC) and Ether (ETH) stopped their upside booms midway on overvaluation risks, with their relative strength index (RSI) indicators returning readings above 70, a sign that traders consider these assets overbought.
Meanwhile, alternative cryptocurrencies picked up their upside momentum in the wake of Bitcoin’s and Ether’s flat price action.
Related: Solana hackathon aims to bolster crypto innovation in India
For instance, the last seven days saw Solana surging by 57%, much in line with XRP, which also climbed 57%. Ethereum’s top rival, Cardano, also reported a 47% spike for its native asset ADA, while meme cryptocurrency Dogecoin (DOGE) rose 34% on fresh Elon Musk and Mark Cuban endorsements.
Top 10 crypto assets’ performance. Source: Messari
But like Bitcoin and Ether, Solana now appears to be facing the same overvaluation risks.
As on Monday, the SOL/USD’s daily RSI reading reached 84, raising profit-taking risks even though optimistic fundamentals ensured bullish backstops to the pair’s ongoing price rally.
SOL/USD daily price chart featuring its overbought RSI. Source: TradingView
In previous instances, an RSI-led sell-off had SOL test its 50-day exponential moving average as support. The wave currently sits around $36.56, down 41% from SOL’s price at the time of writing.
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