Solana (SOL) On The Verge of Clearing $110 Resistance, But A Move Higher Could Trigger a Tumble

Solana price has posted a strong recovery in the past three days and is now sitting above $110. The token touched a high of $113 yesterday after clearing the resistance at the critical $100 price level on the last day of January was rejected at that height.

Even though Solana has seen approximately 8% of gains over the past 7 days, market experts warn that it can plunge towards the immediate support of around $90 if it sees more gains. More on this analysis and other top stories around Solana below:

Solana launches ‘Solana Pay' protocol to enhance crypto payments

Peer-to-peer payments protocol Solana Pay launched on the Solana network yesterday. With collaborative efforts from Solana Labs, Citcon and Checkout.com, the new product has integrated wallets by FTX, Slope and Solana's Phantom.

Solana reckons Solana Pay will be common with digital currencies like Circle (USDC stablecoin). However, it would support other Solana-compatible tokens, including SOL and FTX's FTT. The protocol is expected to enable both POSs and merchants to receive and settle payments in an array of digital asset tokens.

Solana Pay has already been mooted as a digital version of cash payments since it would eliminate intermediaries such as Mastercard and Visa. The protocol is built to play the role of a go-between for fiat currencies and cryptocurrencies. As an intermediary between these two financial systems, the protocol promises to advance the adoption of digital assets to the traditional finance crowd.

As opposed to the current market's crypto on-ramps that interchange between crypto and fiat, it would take in crypto and give out crypto. Should it live up to its expectations, Solana Pay would offer a decent chance to turn crypto's role in completing payments into a practical reality. The existing alternatives are expensive and slow – something Solana Pay will likely overcome thanks to Solana's throughput, speed, low fees, and scalability.

Solana's Phantom wallet reaches unicorn status after completing a Series B funding round

The team behind the Solana-hosted Phantom wallet announced on Monday that it had completed a $109 million Series B funding at a $1.2 billion valuation. The round was led by crypto investment firm Paradigm with participation from a16z, Solana Ventures, Jump Capital, and Variant.

Following its public launch last July, Phantom saw active users grow to over 2 million in the first six months. According to the post, these users have ‘staked over 112.4 million SOL ($10.4 billion), swapped $1.37 billion in tokens, and made 55.2M NFT, DeFi, and app transactions.'

The capital injection will be all-important in adding new features to the wallet and the further onboarding of new users. Phantom explained that the money would also be used in ‘innovating on the multi-chain wallet user experience.' A fraction will be set aside to employ developers as well as professionals to deal with product development and community support.

Two Prime expects Solana to have increased institutional products with the emergence of a robust derivatives market

A recent report by Colorado-based crypto investment firm Two Prime Digital Assets has advanced that Solana will offer the next frontier for institutional investments in crypto. The firm's co-founder Alexander Blum noted that the current market had restricted investors to just Bitcoin and Ethereum as they offer the highest liquidity. However, he pointed out that metrics show Solana is slowly establishing itself as an asset liquid enough to be sought for trading derivatives.

The open interest on SOL futures contracts bulged to $800 million in the last six months. Solana is seeing reduced price volatility as institutional investors (need to) hold the assets underlying the futures contracts they are selling. This has shifted the positions of ‘short-term speculative traders' into the hands of ‘long-term holders.'

While over the counter platforms and DeFi Options Vaults (DOVs) offer SOL derivatives, most crypto derivatives exchanges do not support them currently. Deribit (a derivatives exchange) has recently indicated that it plans to launch a SOL option by mid-year.

The Two Prime's report suggested that if Deribit's plan thrives, then its possible SOL futures and options could join Bitcoin and Ethereum for crypto derivatives on the CME marketplace. The report also explored that the advent of a robust Solana derivatives market meant Solana could develop more enterprise-grade products.

According to Blum, Solana offers something that both Bitcoin and Ethereum do not – the fraction of a cent transaction fee and significantly high TPS. These features, in his view, will position Solana as an appropriate derivatives provider to the profile of users in DeFi, and NFTs that Ethereum hardly reaches.

Solana (SOL) market performance

Solana's token is changing hands just shy of $112 as of writing. If bulls take over and dominate the market, SOL will potentially see an ascent in the short-term, clearing any bearish mood. The token will need a close above $120 to clear a path for further gains.

SOL/USD 7-day trading chart

While some analysts foresee SOL price surging as high as $140, they warn that this height will likely set off a slump. They postulate that at this level (around $140), the market will experience massive selling pressure from holders looking to make profits after what has been a lousy January. There is also a chance that some investors will short at around $120 in anticipation of SOL price plummeting on the back of a correction from higher grounds.

To learn more about this token visit our Investing in Solana guide.