Solana drives strong growth in ecosystem

Since the launch of Solana in mid-October, its price has been gradually rising, with the largest increase reaching 190%. In the past week alone, the highest increase in the price of the currency reached 55%. The current price remains above $50, which makes Solana's supporters excited and finally ushered in an exciting market.

Solana's success is not accidental. From the bull market to the bear market, from the initial public chain status to the impact of the FTX crash, Solana has never wavered in its determination to build an ecosystem. This is why Solana has so many firm believers. We can see its efforts and achievements rooted in ecological construction just from Solana's ecological report in the third quarter of this year.

In the second half of this year alone, Solana launched a new generation of kernel updates, integrated Visa payment functions in the application field, added high-quality projects such as Eclipse, Rome, and Neon EVM to the virtual machine SVM ecosystem, and took the lead in launching the Solana DeFi points plan for multiple DeFi projects. The actions are very frequent, and Solana's efforts have paid off.

At the end of the third quarter, the market value of the Solana ecosystem reached US$8.4 billion, a month-on-month increase of 17%. It should be noted that $SOL’s price plummeted by 34% in June this year because it was listed as a security asset by the SEC, and then immediately rebounded by 90% to 28u. This shows the high market consensus on the value of $SOL.

In the third quarter, the total amount of $SOL staked rose to 400 million, close to the level before the FTX crash. In addition, the NFT minting volume of the Solana ecosystem increased by 316% month-on-month in the third quarter, and TVL also increased by 32%.

Solana, which has gotten rid of the burden of FTX's bankruptcy, has enough confidence to show its edge when the market comes. The strong performance of Solana during this wave of bulls also confirms this point. As Rune, the founder of MakerDAO, said, Solana is the most promising code base. Let us wait and see how high Solana's current silent persistence will bring it in the future.

Solana Current Status: Is It Time to Invest?

Do you have FOMO?

While Solana has been performing well, I’m not going to go all-in on it anytime soon, especially compared to other opportunities. Similar to Chainlink’s recent run to $15, I don’t find it particularly appealing due to its aggressive growth.

Solana has been consolidating since November 1st, and I am closely watching for a breakout. When it broke out on November 7th, I chose to take profits at a little over $50, thinking that this was a decent enough profit.

What happened to the Solana ecosystem?

Many on Twitter are talking about the significant gains for the Solana ecosystem.

We will verify this by looking at the various projects within the Solana ecosystem on CoinGecko. Most of them have increased significantly in value, and this excitement is driving liquidity within the ecosystem.

SOL ecosystem has made progress in the past 7 days

The prosperity of the Solana ecosystem is not only reflected in the main coins, but also includes some altcoins such as Bonk and Radium, which have also achieved significant gains. Over the past month, I have increased my holdings in these altcoins, making it very likely that those who buy in a short period of time will make substantial profits.

However, is now the time to buy? The answer is no. Solana and its ecosystem tokens are about to go through a correction, so it is best to wait before considering a position. The current market is mainly driven by speculative trading rather than bullishness on long-term growth potential.

This pattern of market behavior is consistent with the past, suggesting that the current focus on the Solana ecosystem may change in the near future.

Where will the hot money flow next?

At this stage of the bull market, it is common to see funds rotate into different ecosystems. In the past, we have witnessed similar rotations between Solana, Luna, and Avalanche (AVAX) during the peak of the bull market in late 2021 and before.

This happens because the crypto market is driven by sentiment and traders and profit seekers looking for on-chain opportunities. When one ecosystem becomes overbought, traders move on to the next one.

Although Solana is getting a lot of attention in the market right now, I think it’s time to focus on the next possible hot spot. This change can happen quickly, so it’s crucial to stay ahead of the market.

So liquidity will flow into the Polygon, Avalanche, and Arbitrum ecosystems.

Both Avalanche and Solana are considered Ethereum killers, and historically, capital has flowed between these ecosystems during bull runs.

In addition to Avalanche, I also follow the Arbitrum ecosystem closely. Arbitrum is an L2 solution for Ethereum that has an incentive program to attract swing traders. I also have a trade in Arbitrum as I believe it has the potential to grow significantly over the next week.

Focus on the top projects in these ecosystems to maximize investment opportunities.

Case in point: AVAX and Arbitrum (and possibly MATIC) and the tokens that run exclusively on those networks will be the emerging focus this week and next.

To gain a deeper understanding of these ecosystems, you can focus on some specific altcoins. In the Avalanche ecosystem, I am optimistic about the potential of projects such as GMX, Radiant Capital, Benqi Protocol, Trader Joe, and Camelot.

These projects are either decentralized exchanges or lending platforms built specifically for the ecosystem like Avalanche and Arbitrum. They are expected to perform well as liquidity enters the ecosystem. Arbitrum has attracted attention due to its popularity among DeFi traders, and its incentive program is also increasing yields.

AVAX tokens on the chain are sorted by TVL from high to low

Despite AVAX's overall growth, these specific platforms remain undervalued, so there is potential for significant returns.

Likewise, within the Arbitrum ecosystem, Ethereum-related platforms like GMX and Radiant Capital are also poised for a breakout.

Polygon

In addition to AVAX and Arbitrum, Polygon (MATIC) has also come to the fore, especially as it is about to upgrade to Polygon 2.0 and rename its MATIC token to POL. Polygon has upgraded its tokens and now has a brand new token economy. Although Polygon's ecosystem is not primarily focused on DeFi, it has attracted widespread attention through rebranding and token upgrades.

When following the rotation of ecological sectors, it is important to grasp the timing, because such rotation opportunities do not appear often. Usually, by the third rotation, the trend may gradually fade.

This is because investors are still enthusiastic about the Solana ecosystem and are willing to invest in Solana-related projects. When they start to turn to AVAX, they have personally experienced the rise and fall of the Solana ecosystem and therefore want to adapt to the rotation speed as quickly as possible. They will invest in the top AVAX altcoins and once they see the gains, they may quickly exit and turn to the next chain, whether it is Arbitrum or Polygon.

As people become more familiar with this alternating pattern, the whole process will become faster. This is why I don't recommend entering an ecosystem with a very small plate.

In the hot spot rotation, always staying one step ahead is crucial to maximizing opportunities and profits.

Everyone, please move your hands and pay attention~

Thank you for your support, see you next time!