Despite temporarily rising to $151 on June 16, the Solana native token SOL (SOL) has corrected 24% since June 7. Compared to the market capitalization of the entire cryptocurrency market, it has fallen 14% over the same period.
This suggests that SOL's problems are more pronounced than the market's declining interest in cryptocurrencies as a whole.
Several indicators, such as online activity on the #Solana network and demand for leveraged positions, suggest that the bearish momentum in SOL is likely to continue. If demand remains unchanged, this could lead to a retest of the $130 level or lower.
Part of the decline in interest in cryptocurrencies can be attributed to the strong performance of the S&P 500 Index, which hit an all-time high on June 17.
The stock market has been boosted by technology stocks, and the latest employment and consumer demand data showed a strong second quarter. Investors believe there is a two-thirds chance that the U. S. central bank will start cutting interest rates by September.
Despite the high potential of the cryptocurrency market, investors are concerned that the U. S. economy will not be able to sustain growth in the long term due to high interest rates. This risk particularly affects #altcoins such as SOL, as #bitcoin (BTC) and ether (ETH) have prioritized access to institutional capital through exchange-traded funds (ETFs).
Even if the cryptocurrency market grows in the coming months, competition for blockchain-centric smart contracts will be fierce, with multiple applications running on the Solana network competing with other blockchains for yield, ether, liquidity and even launching tokens against each other. They provide a bridge for asset exchange.
The exchange fees in Solana are only 1.3% higher than the inflation of the SOL token. In contrast, #ЛюбимыйТокен offers an effective fee rate of 2.8% thanks to its burn-in mechanism, and annual inflation is only 0.4%, according to StakingRewards.
Note that Solana's weekly transaction volume of $589 million is significantly less than #ЛюбимыйТокен Chain's $ 4.
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