A current cost rally within the Solana (SOL) market ran from steam halfway as traders’ attention now use crypto-focused hedge fund Alameda Research’s insolvency rumors.
Alameda Research insolvency rumors affect SOL
On November. 7, SOL’s cost stepped nearly 6% to around $30.50. The intraday selloff came as part of a wider pullback trend that began on November. 5 when SOL peaked around $38.75. Between now and then, the Solana token is lower over 20%.
The start of SOL’s plunge coincided with reports that Alameda Studies have liabilities worth $8 billion but might not have liquid assets on its balance sheet to satisfy individuals obligations.
Interestingly, the need for all individuals assets stepped synchronously previously 48 hrs — including SOL, in addition to FTX Token (FTT), Serum (SRM) and Oxygen (OXY) — on fears of cascading liquidation if Alameda Research becomes insolvent.
1. low liquidity tokens
$4.6bn from the assets have been in low liquidity tokens:
⚰️ $SOL
⚰️ $SRM
⚰️ $MAPS
⚰️ $OXY
⚰️ $FIDAapart from SOL there’s not a way to liquidate all of those other holdings without completely crashing the markets
the final 4 out there are highly dillutive too!
— otteroooo (@otteroooo) November 7, 2022
Google partnership, NFT growth
Nonetheless, traders demonstrated curiosity about holding SOL’s cost above $30, a tech support team level, on November. 7. One good reason might be a flurry of positive news that emerged over the past weekend, such as the launch of smartphones, DApp stores, along with a Google Cloud partnership.
Additionally, Solana continues gaining greater traction within the nonfungible token (NFT) sector. For example, the entire quantity of NFTs released around the Solana blockchain expires 19.3% quarter-over-quarter to achieve over 8 million in Q3 2022.
“Several developments across Solana’s NFT sector permitted it to keep a powerful position in accordance with a peer number of the very best L1s by secondary NFT product sales,” noted James Trautman, investigator at data resource Messari, adding:
“Secondary product sales were able to eclipse Ethereum at the begining of September. A lot of the activity in that period required put on Magic Eden V2.”
On November. 2, Instagram added support for Solana-based NFTs, enabling users to produce, sell and market their most favorite digital arts and collectibles.
50% SOL cost rebound?
As pointed out above, the SOL price’s correction demonstrated indications of exhaustion if this retested $30 since it’s support level on November. 7.
Since August 2022, two rebound moves out of this support line saw SOL recovering to almost $37, excluding once once the cost tucked toward $27.75 in October. The same cost ceiling, along with a multi-month climbing down trendline resistance, was instrumental in capping the Solana token’s cost rally within the week ending November. 6.
Related: Solana’s co-founder addresses the blockchain’s reliability at Breakpoint
A rest over the $37 resistance line might have SOL test the $44.25-47 range after that, or perhaps a 50% cost rally when measured from current cost levels, by December 2022
On the other hand, a long selloff underneath the $27.75-$30 support area risks delivering SOL’s cost close to $19.50, or about 40% less than today’s cost.
The $19.50 level offered as support between March and This summer 2021, as proven within the chart above.
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