SOL Token Rebound: A Crash-Survival Or A Sustainable Rally?

SOL’s price has increased by 114% so far this year gradually recouping losses from early November.

The native cryptocurrency of the Solana blockchain, the SOL token, has seen a dramatic decline in value as a result of the crypto market crisis. The price of the SOL token dropped to lows not seen in several months as a result of the crash, which were brought on by a brief outage on the FTX platform. The token has now recovered, doubling in value from the lows caused by the crash.

SOL has increased in value by twofold since mid-December to trade at around $21, peaking at $24 earlier this week. This is roughly where it was before investors began to worry about its connections to the troubled cryptocurrency exchange FTX and its sister company Alameda Research. SOL is up 114% this year and has increased by 22% just in the last week.

Following a supportive tweet from Vitalik Buterin, co-founder of Ethereum, just after SOL had fallen to a record low of $8.19, the rise was sparked by his optimism that the Solana community would be given a fair chance to prosper.

The price rebound of SOL has revived optimism among blockchain CEOs, developers, and crypto analysts about the long-term prospects of the blockchain.

Tom Dunleavy, a senior research analyst at Messari, stated in a recent research note that Solana’s on-chain performance has been robust, with daily active wallet interactions on key Solana protocols remaining steady post-FTX and transaction volumes and active accounts returning to pre-FTX levels.

As SOL’s price dropped after the FTX crisis, the number of validators also plummeted from 2,400 to 2,000, according to Michael Repetny, a key contributor to Solana-based liquid staking protocol Marinade Finance.

Repetny linked the recent increase in trade activity in Solana to the rising demand for the meme coin BONK.

Solana has held the ground solidly, according to Stefan Rust, CEO of blockchain technology company Laguna Labs, by remaining among the top 20 cryptocurrencies by market capitalization after FTX.

Brendon Sedo, a contributor to layer 1 blockchain Core DAO, compared Solana’s current situation to Ethereum’s crash in 2018 and thinks it would recover despite increased competition from rivals Aptos and Sui, for example. He further added, “I think this is probably going to be Solana’s outcome, pulling off what Ethereum finally pulled off during the hard days of the 2018 bear market.”

Many members of the cryptocurrency community are now speculating as to whether the SOL token’s value recovery is long-term. According to several experts, the Solana blockchain’s solid foundation and expanding acceptance by significant companies in the sector will continue to fuel demand for the SOL token. However, there are also risks that the rebound may not be sustainable, and the long-term success of the SOL token and the Solana blockchain is uncertain.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing