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Here’s what Solana’s ‘liquidity black hole’ means for the altcoin market

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Source: Unsplash

Solana [SOL], at press time, was up by 75% over the week. This was thanks to rising NFT and DeFi usage on the high-volume blockchain network. After recently recording its ATH of $79.57; the 10th largest token was trading just above the $72 price level, after a hike of 5% in 24 hours.

Source: Coinstats

As previously highlighted, different analysts within the crypto-community have shared their optimism for Solana in the past. That said, here’s an interesting take on this trending “beast” of an altcoin.

Crypto-analyst and investor Daniel Cheung, for instance, has been bullish on this network and its ecosystem, both in the short and the long term. Investors and traders should pay attention, he advised.

Making its way into CoinMarketCap’s top-10, Solana has remained impervious to the downside price action recorded by most cryptocurrencies on the list. Ergo, it makes sense to explore what analysts think is supporting such growth.

SOL’s short term

In a series of tweets, Cheung highlighted Solana’s potential for another rally. Such a rally would push its price 4 times up from its current value, he asserted.

Consider this – Solana’s TVL (Total Value Locked) recently recorded a new all-time high of $1.93 billion, on the back of its price action.

“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,” he added in a tweet.

Source: Twitter

SOL’s long term

Zooming out a bit, the analyst went on to project a path that might help SOL go to the moon. He predicted,

“On a base case scenario where I believe TVL could get to 4 billion and you apply a 15x to 20x TVL multiple, $SOL could get to a 60B to 80B circulating market cap. That would be 4x from here. Thinking the big picture is how you get rich in investing.”

In addition to this, it’s interesting to note that while SOL rose, other ecosystems have been on a decline since. These include the likes of Binance Smart Chain. What do these findings imply then?

Well, according to another analyst, SOL will represent a ‘liquidity black hole‘ for the altcoin market over the coming days/weeks.

Solana, no doubt, has recorded a massive surge recently and might continue to do so. High volumes and sustained buying pressure will be key to pushing Solana north over the coming sessions.

It’s no wonder then why some individuals are getting on the express train to create “generational wealth.” Consider the crypto-influencer “The Crypto Monk,” for instance. A recent tweet said,

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Shubham is a full-time journalist at AMBCrypto. A Master's graduate in Accounting and Finance, Shubham's writings mainly focus on crypto-regulations across the United States and Europe. Also, a die-hard Chelsea fan #KTBFFH.

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