Solana is undoubtedly one of the biggest losers of 2022. With a price drop of 96.2% from its all-time high, investors had to cope with a harsh price correction. One of the main reasons for the crash can be seen in the insolvency of FTX.
Since Sam Bankman-Fried’s investment firm Alameda Research still has a considerable stack of SOL in its portfolio, the situation is unlikely to improve, at least in the short term. New CEO John Ray will inevitably have to liquidate this position in order to pay out customers who have been harmed.
In the wake of these negative developments, SOL’s price slipped to $9.13 at press time. But Chris Burniske, partner at Placeholder VC, shared some reasons why Solana is far from dead. As the former head of ARK Invest Crypto explained, he was recently asked by Vitalik Buterin what he likes about Solana.
Burniske replied that for him, Solana has a “unique flavor of hardcore devotees & nerds,” meaning that they will drive innovation apart from Ethereum:
Some of the devotees are hardware junkies, others are network optimization nerds, the validator community is crazy committed, and generally, a layer deeper than the financial opportunists are builders that get truly excited by Anatoly Yakovenko’s [co-founder of Solana Labs] vision.
According to Burniske, Yakovenko himself is also one of the reasons he believes in Solana. “He is admittedly more pragmatic than Vitalik,” the analyst said, further explaining that this approach is guided by the goal of making the “blockchain accessible to billions of people.”
In terms of the developer ecosystem, Burniske asserts that it provides a perfect mix of crypto backend experts and Web2 front-end developers – “crypto needs more of them.” At the same time, the analyst notes that the Solana ecosystem isn’t just made up of die-hard crypto devotees, so it’s harder in a bear market “when some of the web2 people lose their nerve.”
As for the technology, Burniske is also very optimistic, saying SVM is more powerful than EVM. “While it has competitors, I anticipate Solana will be *the* blockchain ecosystem known for consensus near the speed of light […] and that will attract builders that prioritize speed w/ sufficient decentralization,” the analyst concluded.
The start of 2023 is likely to be a slow one for the Solana price due to selling pressure from John Ray. However, once investors rebuild confidence, the $10.94 level should become key. Then, the level at $11.93 becomes interesting, as the 1-day chart shows.
However, a first recovery rally is likely to falter. If a breakout occurs, the six-week resistance at $14.90 will come into focus and could be of key importance in determining whether SOL has the potential for larger price gains. If so, the area between $18.31 and $19.94 could provide the next resistance. Once again, investors are likely to want to take more profits here.
If SOL also succeeds in breaking through this zone in 2023, a retest of the $25.87 mark would be possible, an area that served as extremely important support back in June. Here, however, a significant price drop towards the south is also to be expected.
If and when Solana will be able to reach the resistance at $38.78 again in the year is currently questionable. Only if the bulls return to the crypto market as a result of a Fed pivot with investors developing deep confidence in Solana again, this price level should also be able to fall.
Jake Simmons has been a Bitcoin enthusiast since 2016. Ever since he heard about Bitcoin, he has been studying the topic every day and trying to share his knowledge with others. His goal is to contribute to Bitcoin’s financial revolution, which will replace the fiat money system. Besides BTC and crypto, Jake studied Business Informatics at a university. After graduation in 2017, he has been working in the blockchain and crypto sector. You can follow Jake on Twitter at @realJakeSimmons.
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