Network Upgrades and Record Inflows Drive SOL to New Highs
Solana's SOL surged more than 12% in 24 hours, reaching its highest price since May 2022 due to network upgrades and record inflows into Solana-focused investment products.
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SOL is up 10% in the last 24 hours, enough to take the altcoin to its highest price since May 2022. It is now at a 14-month high.
According to data from CoinGecko, SOL is currently trading at $43 after reaching as high as $46 before settling at its current price. With its current price, SOL has gained 80% in the last 14 days and surged 120% in 60 days. Presently, Solana is the seventh largest cryptocurrency in terms of market cap.
The performance is remarkable enough to make Solana one of the year's best-performing assets. It is even more surprising given how the blockchain suffered in the aftermath of the FTX collapse. Alameda Research and FTX are major investors in Solana, and their collapse caused a liquidity drain and a decline in activity.
There were doubts about whether the network would survive after the incident, and for a moment, it looked like the death of the network. SOL dropped as low as $9.65 in the early days of January. But Solana's fortunes have changed significantly since then, as its value is more than 200%. Despite its performance, SOL is still down 83.2% from its all-time high in November 2021
What Has Contributed to Solana's Resurgence
At its current price, SOL is outperforming the rest of the crypto market. The resurgence is primarily due to upgrades to the network and increasing investments into SOL-focused digital assets funds.
According to CoinShares, Solana investment products recorded $23.9 million weekly inflows, representing its largest weekly inflow since March 2022. This puts Solana's YTD flow at $55 million compared to Ethereum, which is in the red for $104 million. Thus, Solana is the altcoin with the most inflows this year, and only Bitcoin has more inflows.
Meanwhile, Solana has also seen network upgrades this year to improve its stability. This has helped to prevent the usual downtimes associated with the network.
The most recent upgrade to the network is the 1.16 update, which adds features such as improved runtime support for zero-knowledge proofs, enhancement for validators, and confidential transfers. All these have led to increased activity and daily active users in recent weeks.
Another factor that has helped Solana is the recent crypto market performance. With Bitcoin finally establishing itself above $35k, the rise in value of the flagship asset has also helped altcoins such as Solana to record gains.
Incoming Selling Pressure?
Despite the recent positive performance of Solana, there are still concerns that FTX's actions could affect its value. The bankruptcy estate of FTX holds a sizable amount of SOL and has been offloading some of the assets.
Although the sales have not affected SOL so far, experts predict possible selling pressure soon. FTX has moved $35 million worth of SOL to exchanges and recently unstaked $67 million of SOL.
The 1.6 million SOL were restacked on the 30th of October
pic.twitter.com/OrCtgUFC9v — MartyParty (@martypartymusic) October 30, 2023
