- Solana price has made a strong recovery after soaring by 215%.
- It has made a strong comeback after plunging after the FTX collapse.
- Cameron Winklevoss believes that cryptocurrencies cannot be stopped.
I define fallen angels as companies or cryptocurrencies that were once red hot but that have lost favor among investors for one reason or the other. In the crypto industry, there is no bigger fallen angel than Solana, which was once a top five crypto with over $20 billion in total value locked (TVL).
Solana as the fallen angel
Fallen angels have done well in 2023 amid a strong crypto bull run. Solana price has soared by more than 215% from its lowest level in December, meaning it has outperformed mega coins like Bitcoin and Ethereum. Other fallen angels that have done well this year are Internet Computer’s ICP and Filecoin’s FIL.
Solana became a fallen angel because of its exposure to FTX, which I wrote about here. After the company’s collapse, investors dumped the SOL token and assets in its DeFi ecosystem. A good example of this was Serum, which lost more than a billion in assets.
There are several reasons why SOL price has soared despite the challenges in its ecosystem. First, while Solana’s DeFi ecosystem collapsed, its NFT performance boomed, helped by Bonk. Data compiled by CryptoSlam shows that the volume of Solana NFTs has done well in the past few months.
Second, several Solana DeFi platforms have attracted inflows recently. A good example of this is Marinade Finance, Lido, Orca, and Raydium did well. Most of these platforms have seen their inflows jump. Further, Helium, a leading blockchain platform has announced that it will migrate to Solana.
Finally, retail traders and investors believe that Solana is extremely undervalued and that the FTX crash was just temporary. Indeed, data shows that the volume traded has increased significantly this year.
Like oher cryptocurrencies, this rally has been driven by the broad gains in the crypto industry. Bitcoin recently crossed the key resistance level at $25,000. In most periods, cryptocurrencies have a close correlation with each other.
Will the Solana price recovery continue?
The upward trend of Solana will depend on how the crypto market evolves in the coming months. It will also depend on the actions of the Federal Reserve, which has hinted that it will continue hiking in the coming months. Some crypto watchers believe that the crypto rally is here to stay. In a tweet, Cameron Winklevoss said:
“My working thesis atm is that the next bull run is going to start in the East. It will be a humbling reminder that crypto is a global asset class and that the West, really the US, always only ever had two options: embrace it or be left behind. It can’t be stopped. That we know.”
Of course, as the founder of Gemini, Winklevoss hopes that cryptocurrencies will maintain their bullish rally in the coming months. On the other hand, there are other analysts who expect that cryptocurrencies and stocks will suffer a hash retreat soon.
One of them is Jeremy Grantham, the founder of GMO, a $70 billion fund. He expects that the S&P 500 will crash by about 20%. If this happens, we could see coins like Solana plunge because of the close correlation that exists between stocks and digital assets.
