Following a huge sell-off, the cryptocurrency market has been in dire conditions for the last month. Several cryptocurrencies have followed suit, with several losing double-digit %ages of their earnings. Outliers are appearing, though, as the new asset class begins to see much-needed bullish activity.
Solana, which lately experienced double-digit increases at the market’s opening, has caught investors’ curiosity. SOL jumped by 17%, bolstering investor optimism in a possible return.
The cryptocurrency market has followed suit, increasing by 5% to $930 billion in total value locked (TVL) puzzling several investors whether this is a profit recovery.
Could this be a great time to buy SOL? Let’s find out!
Several Factors Resulted In This Jump
Following an industry-wide drop, the crypto market had a tough May. Since then, the spiral effect has caused a dip below the $1 trillion mark. The culprits include Terra blockchain’s failure and the stock market’s bad performance.
The current Russia-Ukraine conflict has caused inflation to quadruple, and the US Federal Reserve (commonly known as the Fed) has reported even worse outcomes. The top US financial body, according to Chairman Jerome Powell, will raise its inflation target rate to 0.75 %, the highest since 1994. The Federal Reserve expects that by slowing the economy, it will assist to curb the fast-moving train of inflation.
Since the start of the Covid-19 epidemic, which grounded the global financial sector, inflation numbers have continued to rise. The United States bore the brunt of the financial crisis, with inflation reaching 8.6 % in May, the highest rate since 1981.
The figures are not likely to fall anytime soon, and investors are already looking towards alternative strategies to preserve their capital.
Bitcoin, the leading cryptocurrency, provides one option. The value of the blockchain has lately risen over the $21,000 mark.
With the whole industry turning green, altcoins have also tapped into this bullish tide. Monthly losses have also decreased. SOL’s technicals changed from a ‘Strong Sell’ to a more mild ‘Sell.’ This suggests that investor trust in the digital asset is expanding.
Innovative Fee Model in the Pipeline
Because of its fast throughput and minimal costs, the Solana blockchain rose to prominence in 2021. However, its transaction cost of less than $1 was a tremendous lure considering that the main decentralized applications (dApps) network Ethereum was far more expensive.
Regardless, the Solana blockchain is now evaluating its cost structure. The blockchain pricing mechanism is structured such that the user with the highest offer is placed at the front of the transaction queue, regardless of who initiated the first call.
Nonetheless, Solana co-founder Yakovenko aims to change this strategy. Yakovenko, who goes by the Twitter handle ‘TolyxNFT,’ recently, pointed out the negative impact of this strategy on other bidders in a tweet.
To provide a solution, the blockchain developer said in a Github repository that all transactions should be put into account buckets and quickly handed on to the next validator to guarantee that accounts are not starved on forwards. This guarantees that everyone receives timely responses, regardless of who made the purchase first or how much they are ready to spend in transaction fees.
Robinhood Support Adds To Jump
SOL trading is predicted to grow in popularity in the following weeks. According to a recent tweet by Robinhood, a zero-commission online trading service, the SOL token is now being considered for inclusion among the crypto assets on which its customers can bet.
Despite a contentious 2021 due to the GameStop trading fiasco, Robinhood remains a popular site for US investors. The multi-asset broker presently has 31 million members, with a rising number of investors taking advantage of its zero-fee crypto trading option.
The SOL price might benefit from an extension onto the Robinhood platform.
If this occurs, strong investor demand is anticipated to increase, and now may be an excellent opportunity to purchase Solana.