Was Solana A Q4 2023 “Bubble” That Has Popped?

Dalmas Ngetich

1 year ago

2 mins read

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The crypto market has recently been a roller coaster, especially in H2 2023. Solana, a high-throughput blockchain, emerged as one of the best performers in the top 10 coins by market cap.

In Q4 2023, Solana soared, reaching highs of around $125 before cooling off to spot rates. However, some think the uptrend is over, with SOL edging lower under increasing liquidation pressure.

The Solana Bubble Has Popped, Is This True?

Lido.eth, while taking to X on January 7, said Solana is a “Q4 2023 bubble” that has “already popped.” The analyst added that this formation doesn’t mean SOL is “worthless or won’t be used anymore.” However, based on Lido.eth’s assessment, the Solana “growth story has ended,” calling serious questions into the project’s immediate potential.

In H2 2023, Solana grew on renewed interest in the high-performance blockchain. Propelled by rising activity in decentralized finance (DeFi) and non-fungible token (NFT) scenes, SOL reversed losses recorded in November 2022.

Moreover, as the crypto community tracked the Securities and Exchange Commission (SEC) and whether they would approve the first spot Bitcoin ETF, altcoins, including SOL, became major beneficiaries.

Arthur Hayes, the founder of the cryptocurrency exchange BitMEX, also believes that the Solana rally is over. In December 2023, Hayes tweeted that he had rotated funds from Solana to Ethereum, citing “divine inspiration.” The BitMEX co-founder also said ETH may rally to reach $5,000 but without giving a specific timeline as to when this lofty target will be reached.

SOL Remains In An Uptrend, Back To $125?

Despite these bearish sentiments, some Solana supporters believe the platform has a “bright future.” They point to the upcoming launch of the Firedancer client.

This validator client will make the network more robust and increase efficiency. It will aim to decentralize Solana further, making it more reliant by eliminating weak points resulting from client concentration. From a price action perspective, continuing the overall crypto uptrend could also buoy SOL prices in 2024.

Looking at the Solana price chart, the uptrend remains, but sellers dominate, at least in the short term. To quantify, SOL is down 30% from the December 2023 peak when it topped at around $125.

Solana price trending upward on the daily chart | Source: SOLUSDT on Binance, TradingView

With prices trending inside the bear bar of January 3, sellers have the upper hand from an effort-versus-result perspective. For the uptrend to resume, there must be a clear, high-volume close above $100. If not, steep losses below $85 might trigger a sell-off that could price toward $60 or worse.

Feature image from Canva, chart from TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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