Making its way into the crypto top 10 by market cap, Solana (SOL) has reached a new all-time high briefly hitting over $80 in the past day. At the time of writing, SOL trades at $76,38 with a 15% profit in the daily chart.
Solana has remained impervious to the downside price action experienced by most cryptocurrencies in the top 10. As NewsBTC reported, SOL records over 140% profit in the past month and seems poised for more appreciation.
Investor Daniel Cheung has been bullish on this network and its ecosystem and believes it will be a strong competitor for Ethereum in the coming months. Thus, Cheung expects SOL to provide one of the best risk/reward investments in the crypto space for the long term.
After its more recent rally to an ATH, Cheung published the main reasons that could make investors rethink the possibility of taking profits in the short term.
According to Cheung, Solana has the potential for another rally that could push its price 4 times up from its current value. Looking at this network at its ecosystem’s fundamentals, the investors found support for its bullish thesis.
Per SOL’s current total value locked (TVL) has followed its price action and recently reached a new all-time high at $1.93 billion. The ecosystem has benefited from several product launches in the DeFi and Non-fungible token (NFT) sector.
While TVL isn’t a perfect measurement of adoption, it is a good proxy because it does show how much value people are entrusting to smart contracts.
As a consequence of Solana’s rising, other ecosystems have been on a decline after being an important hub for finance applications, such as the Binance Smart Chain.
The Long Term Effect On The Altcoin Market, What Solana Could Trigger
Moreover, Cheung expects Solana’s fundamentals to continue to strengthen with the potential for its ecosystem to increase its total value locked 15 to 20 times from its current levels.
On a base case scenario where I believe TVL could get to 4bn and you apply a 15x to 20x TVL multiple, $SOL could get to a 60bn to 80bn circulating mkt cap. That would be 4x from here. Thinking big picture is how you get rich in investing.
Pseudonym trader Altcoin Sherpa shares Cheung’s bullish vision. The trader believes that Solana and Terra, another layer one projected to become a strong competitor for Ethereum, could absorb capital from other altcoins.
Thus, SOL and LUNA could benefit, while other cryptocurrencies bleed:
SOL and LUNA will be liquidity black holes for the altcoin market in the coming days/weeks. If you’re asking yourself “why isn’t my altcoin moving??”, it’s probably because all that $ is going towards the super trending shit right now. Having some exposure to these is good.