SOL is gaining momentum, how long can it continue to rise?

Belief comes from falling, consensus comes from rising.

Written by: Lianyanshe

Why is SOL so strong and so far ahead in technology? Ecological explosion? Capital self-rescue? You have heard too many of these views recently. If I say something different, it may subvert your understanding. At the end of the article, I will also talk about when SOL is expected to rise. This is what you need to be concerned about if you hold positions.

There are 3 main points discussed one by one:

1. Belief comes from falling, consensus comes from rising.

2. Creating assets is the key, MEME leading BONK goes out of the circle and new narrative Depin

3. There is a large amount of locked positions in the chip structure and it is highly concentrated. FTX’s bankruptcy cannot be dealt with in the short term and there is no selling pressure.

Why is it said that belief comes from falling and consensus comes from rising?

Comparing the bulls and bears that ETH has experienced before, you can understand. ETH performed particularly well in the last bull market, rising nearly 60 times compared to the lowest point in 2018. But before that, compared with the high point in 2017, ETH fell from 1440 to 81.79, a full drop of 94%, and then SOL fell from 259.9 to 8, a drop of 97%. When market confidence is strongly impacted, it triggers large-scale selling behavior, which is almost equivalent to clearing everyone’s accounts and starting over. This is not only experienced by ETH and SOL, but BTC has also experienced declines of more than 90% several times, which has wiped out all accounts. The floating chips are cleared and the position holders are stable. As prices rise, the continuous creation of assets creates a money-making effect, and external buying begins to enter. Only then will everyone pay attention to the changes brought about by fundamentals. There are two types of people who drive prices up. One is those who already hold and keep adding to their positions, and the other are potential buyers who will buy at support levels or in an upward trend. When all the people who want to buy in the market buy and hold for a long time, it will go sideways until the next key event.

Why is asset creation key?

The two bull markets of ETH both experienced asset expansion, and the ICO and DeFi boom locked up most of the liquid chips. SOL is also the same BONK that has completed the road of Thousand Cups, and then introduced the concept of Depin to expand the circle to acquire new users and create new assets. The decision of whether a public chain can win has never been about how advanced the technology is or how perfect the ecology is, but how much money is made. effects and new narratives. As for ETH, due to the low efficiency of Gas capital flow and the large number of believers (everything that should be bought is currently bought) and the chip structure of the POS mechanism has stabilized, it needs to wait until the next key event, such as a significant reduction in Gas or the entry of ETFs through the introduction of new funds. , due to its large number of believers and sufficient potential buying, its explosive power will be very powerful after a key event is triggered, so don’t rush to badmouth it.

Why is it necessary to have a large amount of lock-up in the chip structure?

The market generally believes that the more even the chip structure is, the better, and that a high concentration of chips is a bad thing. In fact, just the opposite is true. You must know that every individual participating in market transactions is the same as you. The more even the chip structure is, the more factors that need to be played, and the more difficult it is to rise. The factor that determines the price increase is that potential buyers are not the distribution of chips that have already purchased the target. There are two types of potential buyers, one is those who have already held and continue to add positions, and the other are potential buyers who will be at the support level or in the upward trend. Medium buying and stable position holders constitute an upward trend in prices. This is also an example of ETH. In the last round of ETH, there were also a large number of locked chips. ETH2.0 was locked and could only be withdrawn after the upgrade was completed. Grayscale Fund’s large purchases could only be entered but not withdrawn. A large number of locked chips in DeFi By locking up almost all floating chips, ETH can achieve a maximum increase of 60 times. Without these floating chips, the locked position will definitely encounter huge pressure. Talking back to SOL, FTX and Alameda wallets hold a total of approximately 55.8 million SOL, accounting for 13% of the total circulation. This is completely similar to what ETH experienced at the time, but after the SOL in FTX and Alameda wallets resume circulation, it may It is no longer strong. This is similar to the withdrawal of funds after the Shanghai upgrade experienced by ETH.