- Summary:
- Why has the Solana price jumped sharply recently? We explain what to expect now that the coin is in extreme overbought zone
The Solana price upward momentum is continuing. The SOL token rose to an all-time high of $75.45 as demand rose. It has risen in the past four consecutive days and is about 3,800% above where it started the year at. This brings its total market capitalization to more than $18 billion and is the 10th biggest coin in the world.
Solana strong rally
Solana is a leading blockchain network that allows developers to build decentralized applications. Together with Binance Chain and Polkadot, Solana is known as an Ethereum-killer. This is because its goal is to become the biggest DAPP development platform.
For one, it has a faster speed than Ethereum and it is relatively safer. Solana claims that it can handle 50,000 transactions per second. This is substantially higher than 13 transactions per second that Ethereum handles.
Solana is backed by leading venture capital firms like Andreessen Horowitz and Polychain Capital. Just recently, the firm raised more than $314 million from these firms.
While Solana is gaining traction, there is no guarantee that it will succeed. For one, it faces substantial competition from other Ethereum-killers like Polkadot, Binance Chain, and Crypto.com. Also, Etheum has a headstart, with its DeFi ecosystem having a total value locked of more than $79 billion. The team is also working to improve its speed.
Solana price prediction
In my last article on Solana price, I warned bulls to brace for a major pullback. This forecast was wrong since the coin continued moving substantially higher. Today, the coin remains above its previous all-time high of $58.50. The parabolic rally appears to see no end.
Meanwhile, the Relative Strength Index (RSI) has been on a steady bullish trend and is currently at 88. This means that it is the most overbought on record.
Therefore, I still believe that the coin will have a major pullback as FOMO traders start taking profit. In other words, the risk and reward ratio is currently tilting towards risk.
