The Rise of Solana: Market Confidence, Ecological Prosperity, and Unique Token Structure

Recently, Solana (SOL) has shown strong performance, attracting widespread attention in the market. Setting aside common viewpoints such as technical advantages and ecological explosion, let's explore the upward momentum of SOL from different perspectives and try to predict its future trends.

Market belief stems from deep corrections

By comparing the historical trends of Ethereum ( ETH ), we can find a pattern: deep pullbacks often nurture new upward momentum. In the last bull market, ETH rose nearly 60 times from its historical low, but before that, it had dropped from $1,440 to $81.79, a decline of 94%. Similarly, SOL dropped from $259.9 to $8, a decline of 97%.

Such extreme market conditions often trigger large-scale sell-offs, washing out most speculators and leaving only steadfast holders. Subsequently, as prices stabilize and rise, new buying interest will be attracted, and the market will begin to pay attention to changes in the project's fundamentals. The main drivers pushing prices up are two types of people: those who already have positions and continue to add to them, and new investors entering at support levels or in an upward trend. When all potential buyers have entered the market and are holding long-term, the market may enter a sideways consolidation, waiting for the next key event.

Ecological prosperity is the key driving force

Both rounds of bull markets for Ethereum were accompanied by the rapid expansion of ecological assets, such as the ICO boom and the DeFi wave, which locked in a large amount of liquidity. Solana also experienced a similar process, with BONK rapidly gaining popularity and the introduction of the Depin concept to expand the user base and create new assets.

The success of a public chain does not solely depend on technological advancement or the maturity of its ecosystem; more importantly, it lies in the ability to continuously create profitable effects and new market narratives. In contrast, Ethereum is affected by high Gas fees, which impact the efficiency of capital flow. Additionally, with a large number of loyal supporters, potential buyers have basically entered the market, and the stable chip structure under the PoS mechanism may require waiting for the next major event, such as a significant reduction in Gas fees or the approval of an ETF, to trigger a new round of growth.

Unique Chip Structure Boosts Rise

Contrary to popular belief, a highly concentrated chip structure may actually be more favorable for price increases. The key to determining price trends lies in the potential buying interest, rather than the distribution of chips held by current holders. When positions are stable, it is easier to form an upward trend.

Ethereum also had a large number of locked tokens during the last bull market, such as ETH 2.0 staking and long-term holdings by institutional investors. These factors locked up a significant amount of liquidity, creating a price increase of up to 60 times for ETH. Currently, a bankrupt trading platform and its affiliated company hold approximately 55.8 million SOL, accounting for 13% of the total circulation. This situation is similar to what ETH experienced in the past, but once these SOL are reintroduced to circulation, it may impact their future performance.

Overall, Solana's strong performance stems from the confidence rebuilt after the market experienced a deep correction, the continuous innovation of its ecosystem, and its unique chip structure. However, investors still need to closely monitor market changes, especially the potential impact when a large amount of locked SOL tokens re-enters circulation.