One thought has repeatedly been popping up in my mind over the last few weeks: something is going on with Solana. Now, I am by no means a complete expert in the inner workings of the Solana blockchain platform, but I know a good chart when I see one.
When we pull up the chart of SOL, it looks to be in the process of forming a high-tight flag pattern. The weekly chart really tells the story. After running up from $20 all the way to $68, SOL has only corrected about 25%. In addition, the large accumulation on the way up followed by the constructive consolidation on low volume is a sign that there has not been any major selling taking place despite the large gains. This is classic high-tight flag action. Moreover, the fact that SOL has been outperforming Bitcoin is another sign of relative strength.
So what is Solana? Solana is an open-source blockchain platform that was designed to be more scalable than other platforms. Solana, like the Ethereum platform, allows for the creation of smart contracts and dapps (decentralized apps). One of the advantages of the Solana platform is that it is able to process transactions at a rate of over 65,000 transactions each second. This is due to proof of history which allows anyone to verify the timestamps of a transaction and thus eliminates the need for a centralized trusted time source.
Although there is an unlimited supply of SOL, the Solana blockchain only issues a set number of tokens at the beginning of each year. This number will be vary based on the rate of inflation. The supply of SOL is also affected by the amount that is staked, as Solana also uses proof of stake in addition to proof of work. I currently own SOL and will be looking to add to my position should key resistance levels be breached.
Risk right. Sit tight.
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Full Disclosure: I currently own SOL, Bitcoin, and Ether.
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