Solana

Solana overcomes FTX fiasco — SOL price gains 100% in Q1

The cryptocurrency market may have overreacted to Solana’s FTX links and its tainted boss, Sam Bankman-Fried.

The price of Solana (SOL) fell nearly 95% in 2022, partly due to its association with tainted crypto entrepreneur Sam Bankman-Fried and his collapsed ventures, FTX and Alameda Research. But so far in 2023, things have improved for SOL’s price.

Solana’s price doubles in Q1/2023

Solana’s price has risen 104% to around $20.60 per SOL in the first quarter of 2023, the highest gains compared to any cryptocurrency in the top 25, including Bitcoin (BTC) and Ether (ETH).

Solana beats top-ranking assets’ Q1/2023 returns. Source: Messari

In fact, January was Solana’s best month since August 2021 in terms of price performance.

SOL’s price rallied by about 140% in it without any major fundamentals that could have driven the rates up. Nonetheless, the SOL/USD pair became excessively oversold in December 2022, which may have influenced traders to buy the dip. 

The rally also coincided with Messari’s analysis of the Solana ecosystem after the FTX collapse, showing its staking and decentralization were stable and actually improved its position after the FTX fiasco.

“Solana will continue to release a multitude of initiatives, including network upgrades, ecosystem developments, and community efforts, to name a few,” wrote James Stautman, a researcher at Messari, adding:

“After a tumultuous year fraught with one challenge after another, light appears to be at the end of the tunnel heading into 2023.”

In other words, the market may have overreacted to Solana’s ties with Bankman-Fried in Q4 of last year, resulting in a sharp rebound.

What’s next for SOL’s price?

Solana underperformed the broader crypto market in February and March after SOL’s January spike left it technically overbought.

Related: Solana plans to improve its blockchain: Here’s how

Solana’s price lost about 40% from the January peak. Its market dominance (SOL.D) also dropped from 0.98% in January to 0.69% in March, suggesting that traders rotated capital elsewhere. 

SOL.D monthly price chart. Source: TradingView

Nevertheless, as of March 31, Solana is trading above two technical support levels: a horizontal trendline that has capped SOL’s downside attempts mostly throughout Q1/2023 and an ascending trendline that served as backup support in early March when the horizontal one failed.

These two support levels have converged. Therefore, SOL/USD now eyes a short-term bounce from there toward a multi-month support/resistance flip level of around $26.50, as shown below. 

SOL/USD daily price chart. Source: TradingView

That leaves Solana with a 30% upside prospect in April. Conversely, a drop below the two support levels could have SOL’s price retest its March low of $16 as the next downside target.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Injective launches layer-2 testnet for Solana-based apps in Cosmos

The new testnet is one of the few networks that uses Solana’s Sea Level Virtual Machine (SVM).

Developers may soon be able to port Solana Web3 apps to the Cosmos ecosystem, bringing new users to these apps and providing a greater variety of uses for Cosmos blockchains. 

According to a March 30 announcement from the developer of Cosmos-based network Injective (INJ), the team has released a layer-2 testnet that utilizes Solana’s Sea Level Virtual Machine (SVM). This means that some Solana developers can now test their apps for use in the Cosmos ecosystem without needing to change the programming language or tooling used.

In a conversation with Cointelegraph, a representative from Injective said the name of the new network is “Cascade” and that it uses optimistic rollup technology.

According to the announcement, the new layer was created with the help of Eclipse, a company that provides customized zero-knowledge and optimistic rollups for developers.

Eric Chen, co-founder and CEO of Injective Labs, stated that the integration should help both the Solana developer community and Cosmos users:

“This new SVM rollup for the Cosmos IBC world will not only empower developers from Solana to deploy their DApps on Injective, but it will also create more opportunities for users to experience the best Web3 DApps in one integrated network.”

Injective stated that the testnet is currently private, but it is “offering a limited number of spots exclusively to select Solana developers” beginning on March 30.

The number of active Solana developer teams increased over 1,000% year-over-year in the third quarter of 2022, according to a report by Alchemy. The network features several apps with over 2,000 unique users, including the nonfungible token marketplace Magic Eden and DeFi protocol MeanFi, according to Web3 analytics company DappRadar.

However, Solana Web3 apps are written for use with the Solana SVM, which is used by few networks other than Solana itself. This makes it difficult for Solana developers to port their apps to other networks without extensive rewriting.

Related: Formfunction to shutter marketplace amid Solana NFT slump

Eclipse also created an SVM rollup for Polygon on February 23.

Cosmos is a group of interconnected blockchain networks developed using the same consensus engine and software development kit. They are connected through the Cosmos Inter-Blockchain Communication Protocol (IBC), and assets on one network can be transferred to others within the Cosmos ecosystem. Injective is one of the networks that make up this ecosystem, and the new SVM rollup is a layer-2 of Injective.

Injective Labs isn’t the only company trying to make Solana apps compatible with Cosmos. Nitro Labs also announced the development of an SVM rollup for the Sei network in September and released a decentralized exchange for its testnet in February.

The Cosmos ecosystem has been growing over the past two years. On March 11, Cosmos Hub governance approved the V9-Lambda upgrade that begins to implement Interchain Security (ICS), allowing members of the ecosystem to share validations resources. On March 29, Circle announced that it will launch USDC for Cosmos via the Noble Network.

Formfunction to shutter marketplace amid Solana NFT slump

The platform didn’t disclose the reason for its closure, but Solana NFTs haven’t been having the best run lately.

Formfunction, a Solana (SOL)-based, nonfungible token (NFT) marketplace, has announced it is closing up shop after only 13 months of operation amid a slump in Solana NFT prices and trading volumes.

On March 15, Formfunction announced it was “shutting down” on March 29, saying it “cannot continue to operate.” The decision was reached after “much discussion and careful consideration, it said.

The exact reason for closing the platform was not disclosed in the announcement.

Formfunction’s head of community and marketing, known by their pseudonym “Magellan,” tweeted on March 15 that the cofounders and the team will “pivot to a new direction, likely outside of the crypto [and the] SOL space,” but did not provide further details.

Cointelegraph contacted Formfunction’s cofounders — Matt Lim and Katherine Liu — for comment but did not immediately receive a response.

The marketplace’s shutdown comes after its launch just over a year ago, on Feb. 3, 2022. According to Magellan, over that time it conducted $5 million in sales despite a “brutal bear market.”

Shortly after its launch the platform also raised a $4.7 million seed round in March 2022 led by venture capital (VC) firm Variant Fund and contributions from other VC firms Solana Ventures, Canonical Crypto, Pear VC, Palm Tree Crew Crypto and OpenSea Ventures.

Since Formfunctions launch, the wider Solana NFT space has plummeted in terms of volume and floor prices alongside a drawdown in the price of SOL.

Figures from Solana NFT data aggregator SolanaFloor show its index of the “blue chip” NFTs on the blockchain saw a 75% price drawdown in dollar terms since early February 2022.

The USD price of an index of blue-chip NFT prices on Solana since Jan. 1, 2022. Source: SolanaFloor

The daily number of buyers of Solana NFTs has also seen a slowdown over the past 12 months. According to data from CryptoSlam, daily unique buyers currently hover around 7,000, almost half the amount seen on average at the start of 2022.

Solana has seen a slide in daily unique NFT buyers (blue) since March 2022 and daily sales volumes have also halved to under $4 million. Source: CryptoSlam

SOL’s price has also tanked since Formfunction’s launch. At the start of 2022, SOL traded at around $100; it has now fallen over 80%, at time of writing trading around $19.

The price of SOL took a significant hit in the November 2022 collapse of FTX and has struggled to regain traction since. FTX founder Sam Bankman-Fried was an early investor in the Solana blockchain.

Related: Do ‘Ethereum killers’ have a future? Here’s what the crypto community says

Notable NFT collections first native to Solana are seemingly abandoning the platform also.

In December last year, DeGods and y00ts — two top-performing Solana NFT projects — announced they were bridging to Ethereum and Polygon to “explore new opportunities” and to allow for the continued growth of the collections.

Blockchain projects face ‘lack of appetite’ from US regulators, says Austin Federa

The Solana Foundation’s head of strategy said he had heard from projects facing “pretty draconian” rules in the European Union related to shifting to non-custodial wallets.

Austin Federa, head of strategy at the Solana Foundation, spoke to Cointelegraph at the ETHDenver conference on the network’s outages, the impact of regulation on other projects, and the launch of its mobile device.

Federa said the New York Department of Financial Services — or NYDFS, one of the state regulators responsible for licensing crypto firms — was essentially setting up roadblocks for many projects looking to issue stablecoins or similar blockchain services. He added that Solana had heard from projects facing “pretty draconian” rules in the European Union related to shifting to non-custodial wallets.

“DFS has not certified Solana yet,” said Federa told Cointelegraph on March 1. “We’re trying to get it underway, but I think that what we’ve seen is a lack of appetite from DFS anywhere. If a new entrant — let’s say, a large financial services Web2 company — feels like they want to start issuing a stablecoin, they feel like they need DFS approval in order to do something like that.”

In response to the recent slowdown in block production, which resulted in a Solana network restart, Federa said there was “no specific root cause analysis” reported by the team’s engineers. He added that there may have been “something about the interaction” between the network’s version 1.13 and 1.14 or in the latest attempt to upgrade that forced validators to restart.

“The thing is about 1.14, it was running on testnet for months before it was actually migrated over to maintenance,” said Federa. “So, what that really sort of highlighted is that the testing infrastructure for releases isn’t quite as robust as it needs to be right now because it wasn’t like this was just something that was just, you know, thrown onto mainnet like willy-nilly. It’s just the testing didn’t catch what this error was.”

Federa said that Solana’s approach has been to develop a faster ecosystem in a matter of months, as opposed to networks like Ethereum, which had taken years. He added that many projects were hurting for venture capital funds amid the bear market and negative press coverage associated with crypto and blockchain, with stability a major factor in the retention of users.

“One of the risks there is downtime, and so that there’s been a sacrificing of stability to get more stuff out more quickly to help the network grow more quickly.”

The collapse of FTX in November 2022 made ripples affecting Solana’s mobile device ambitions as well. According to Federa, Solana had temporarily scrubbed its “tap to pay” fiat-to-crypto feature without a replacement for FTX — the firm had been expected to facilitate transactions — but planned to launch in “the first or second week of April.”

Related: The state of Solana: Will the layer-1 protocol rise again in 2023?

Many on social media have criticized Solana for its network outages, with various causes including a denial-of-service attack in 2021, congestion from nonfungible token minting bots in May 2022 and a consensus failure in June 2022. The cause of the most recent outage was still unknown at the time of publication, but Solana Labs founder and CEO Anatoly Yakovenko said it was not the result of clogging the network’s on-chain voting system.

Solana plans to improve its blockchain: Here’s how

After a network-wide slowdown left users frantic, Solana released plans to improve its latest network upgrade.

The Solana network experienced a noticeable slowdown in block production after its most recent 1.14 network update on Feb. 25. In an immediate response to transaction disruptions, validators downgraded the software to up performance levels.

However, on Feb. 28, Anatoly Yakovenko, the founder and CEO of Solana Labs, released another statement about how the ecosystem plans to improve its recent network upgrades. The major focus of the plan is on stability as the network continues its transition. 

The statement laid out a six-step plan for engineers to help streamline the process and revealed that an adversarial team had been formed, which comprises one-third of the Solana engineering team.

This team was formed to build additional hooks and instrumentation into the validator code and target exploits throughout the underlying protocols.

Additionally, it laid out ways to focus on creating network-wide stability. This includes a second validator client built by Jump Crypto’s firedancer team and Mango DAO developers building new tooling and implementing local fee markets — among other efforts.

Related: The state of Solana: Will the layer-1 protocol rise again in 2023?

Yakovenko’s recent statement also mentioned that an investigation of what happened in the initial outage is still being conducted, with the community to be informed when information is available.

On Feb. 28, he clarified that on-chain voting was not the cause of the slowdown. 

The community response to the outage was one of frenzy, with some users calling the system a “transaction killer.” However, the response to Yakovenko’s improvement roadmap was mixed, with some users saying the news was “great to hear,” while others still questioned Solana’s integrity:

The Solana ecosystem call is planned for March 2, 2023, in which it intends to discuss the state of the ecosystem, among other issues.

Later in the month, on March 27, Helium Network’s communications protocol plans to migrate to the Solana blockchain to deploy oracles.

Solana faces slowdown in block production, network restarted

The issue is linked to the recent network upgrade from 1.13 to 1.14, which slowed block finalization.

Solana network faced a slowdown in block production on Feb. 25 following an upgrade in the validator software. The incident resulted in disruptions to transactions and led validators to downgrade the software in an attempt to restore network performance. 

The technical issue started around 6:00 am UTC, leading validators to downgrade to version 1.13 to restore transactions in the network. The downgrade, however, was not enough to restore Solana to normal operations, forcing the decision to restart the network on v1.13.6.

“The network experienced a significant slowdown in block production that coincided with an upgrade to validator software. Engineers are still conducting a root cause analysis,” noted Solana’s compass website.

Related: The state of Solana: Will the layer-1 protocol rise again in 2023?

The issue is linked to the upgrade from 1.13 to 1.14, which slowed block finalization. The Solana network is currently restarting, with 80% of active validators online necessary to resume operations:

“As more validators complete their restart this number will rise in line with the amount of stake they have delegated: this means larger validators such as CEX have an outsized impact on restart times.“

Solana’s validators discussed a solution to the incident in the hours following the issue. Infrastructure provider Chorus One noted on Twitter that the incident “demonstrated how genuinely decentralized the network is.“ It said:

“Without all these debates, we would be back up in an hour. But, every decision along the way – whether to downgrade, whether to restart, when to switch from downgrade approach to restart approach – is debated. Voting happens. We end up taking 8-10 hours to recovery, instead of 1.”

Solana is an open-source layer-1 blockchain. Its third-generation network architecture is designed to facilitate smart contracts and decentralized application creation. The Solana blockchain was launched during the crypto boom of 2017. The internal testnet of the project was released in 2018, followed by several testnet phases before the main network was officially launched in 2020.

Helium Network sets migration to Solana for March

A 24-hour transition will take place on March 27, when the Helium blockchain will be halted. Proof-of-Coverage and data transfer activities will remain unaffected.

Communications protocol Helium Network has set March 27 as the date for its migration to the Solana blockchain and deployment of oracles as it seeks to improve scalability and reliability.

According to a Feb. 17 blog post, the transition will take place over 24 hours on March 27, during which time the current Helium blockchain will be halted. Proof-of-Coverage and data transfer activities will remain unaffected. A working group of community volunteers is being formed to oversee the migration process. Helium’s team stated:

“This upgrade will encompass all wallets, Hotspots, and Helium Network state, and will take place over a 24-hour transition period commencing at approximately 1500 UTC / 10:00 AM ET.” 

After the chain halt, validators will stop producing blocks and transactions won’t sync. A final snapshot of the blockchain will be taken after the migration of all accounts and tokens to the Solana blockchain, and hotspots will be minted as nonfungible tokens (NFTs), the team said. 

“Note that any rewards generated by Proof-of-Coverage activity in the prior 24 hours will be available to claim in your Helium Wallet after the transition period. Oracles will update claimable balances, and Hotspot Owners will be able to use the new claim function.”

Holders of HNT and MOBILE tokens will not need to take any action to participate in the upgrade. The same applies for the majority of hotspot owners, although large fleet owners may be able to test specific claim functionality or develop custom wallet solutions.

The move to Solana was enabled by the community passing HIP-70 on Sept. 22, with over 80% voting in favour. At the time, developers highlighted the migration benefits would include more of its native token available to subDAO reward pools, improved mining, as well as more reliable data transfer and ecosystem support.

Also last September, Helium creator Nova Labs announced an agreement with American telecommunications provider T-Mobile to launch a crypto-powered mobile service enabling subscribers to earn crypto rewards for sharing data about coverage quality and helping identify Helium dead-spot locations nationwide.

Nifty News: Find love in Paris Hilton’s metaverse, BTC CryptoPunks soar and more

The “Parisland” metaverse experience will launch in time for Valentine’s Day to give budding lovebugs a space to meet, at least virtually.

Swiping right in the metaverse

Famous New York socialite Paris Hilton thinks the metaverse may be the perfect place to find one’s true love.

In a Feb. 9 tweet, the celebrity and reality TV star said she would work with The Sandbox (SAND) to bring “Parisland” to life.

The idea is essentially a Virtual Reality (VR) dating experience crossed with a reality dating show and is slated for a Feb. 13 release in time for Valentine’s Day.

According to a Feb. 9 statement, players will participate in an “in-game dating reality show” hosted by Hilton, where they will virtually meet with five potential lovers.

The experience will run until March 13, with players completing quests to win nonfungible tokens (NFTs) or SAND prizes and memorabilia.

Such quests include choosing a wedding outfit and ring, “rescuing a castaway and flirting with other contestants.”

Nothing shows true love to someone you just met online like NFT “interlaced love rings.” Image: Parisland

Once players complete all the quests and find the love of their life, they’ll have a virtual wedding and Hilton herself will spin the decks for their first dance together.

The event is hosted in conjunction with the Hilton-founded entertainment firm 11:11 Media. The company’s Web3 and metaverse strategy lead, Cynthia Miller, said it was on “a mission to help people find love” with the experience.

Ordinals CryptoPunk knockoffs make bank

Bitcoin (BTC) NFTs enabled by the Ordinals protocol have caused quite a stir in the community, but that hasn’t been enough to stop some from paying thousands of dollars for select collections.

A knockoff of the Ethereum-based CryptoPunks NFT collection called Ordinal Punks has made its way onto Ordinals and has a total supply of 100, according to the project’s website.

According to a price feed in the projects Discord, on Feb. 8, Punk 94 sold for 9.5 BTC ($215,000) at the time.

It’s the most someone has paid for a BTC-clone Punk from the collection, and it’s around double the price of the last CryptoPunk sold from the original Ethereum collection — which sold for 70 Ether (ETH) ($110,000), according to OpenSea data.

Screenshot shows sales from between 9.5 to 4 BTC in the past 48 hours. Source: Ordinal Punks Discord

Other sales from the past 48 hours show one Ordinal Punk selling for six BTC, around $130,000, with others selling for around 4.5 BTC ($100,000).

It’s a significant price jump from the end of last week, where some Ordinal Punks sold for as low as 0.07 BTC ($2,200) on Feb. 2, according to sale data.

RhiRhi’s royalties sell out through NFTs

Royalty rights from Rhianna’s hit 2015 song, “Bitch Better Have My Money,” has just been offered as part of a collection of 300 NFTs.

Jamil “Deputy” Pierre was one of the song’s producers who has now sold roughly 1% of his stake in streaming royalties through 300 NFTs that give the holder a 0.0033% lifetime share in royalties for the record when it’s streamed digitally on platforms like Spotify.

The collection, sold by Pierre in partnership with music royalty NFT platform anotherblock, was put up on Feb. 9 for 0.128 ETH each, or roughly $210.

The same day, anotherblock tweeted the collection had sold out “in a few minutes.”

Anotherblock predicts one NFT to give a “probable” first-year return of 6.5%, which would yield $13.65 a year. At that rate, it would take a holder about 15 years to break even on their investment.

It’s unclear how many royalty shares in the song Pierre has retained after the NFT sale.

Def Jam launches virtual band with Solana NFT collection

Def Jam Recordings, a subsidiary record label of Universal Music Group, is trying its hand at building a Web3-native band through a partnership with Solana (SOL) NFT collection, The Catalina Whale Mixer.

Announced through a Feb. 8 Billboard report, the band, called The Whales, will be comprised of the cartoon whale characters that make up the collection, similar to the virtual band the Gorillaz.

The Catalina Whale Mixer later revealed in a tweet that the band would be a “gamified music group” and holders of an NFT in the collection could “land a role for [their] whale.”

Def Jam has yet to confirm the musicians behind the project, but it reportedly said it would involve a “who’s who” of talent, and The Whales will release a full-length album but did not disclose a timeline.

Def Jam boasts signed artists such as Justin Beiber, LL Cool J, Rihanna and Nas.

In 2021, another universal subsidiary label, 10:22PM, signed a similar NFT-backed virtual band called Kingship, made up of four apes from the Bored Ape Yacht Club (BAYC) NFT collection.

Other Nifty News:

Luxury fashion brand Hermès won a trademark infringement case against NFT artist Mason Rothschild over his use of the Birkin trademark for his MetaBirkins NFT collection. The firm was awarded $133,000 in damages.

YouTuber Stephen Findeisen, better known as Coffeezilla, baited mixed martial artist Dillon Danis into promoting a fake NFT collection which, according to Findeisen, “literally spells out S.C.A.M.”

Solana DeFi protocol Everlend shuts down over liquidity issues

With FTX’s ripple effect on market liquidity, Everlend is closing its doors and urging clients to withdraw funds.

Solana decentralized finance (DeFi) protocol Everlend Finance is closing down its operations and urging clients to withdraw funds from the platform.

The company announced the decision on Twitter on Feb. 1, saying that despite having “enough runway” to continue operating, it would be a gamble under current market conditions. In particular, Everland’s team noted:

“Unfortunately, rn liquidity is just not there and this is so not just about Solana and the B/L market (on which Everlend is 100% dependent) keeps shrinking. In these conditions pressing forward is a gamble. And even though we had enough runway, we decided to stop now.”

Everlend also noted that deposits from underlying protocols are now in vaults, and the app will be in withdrawal-only mode until the funds are cleared. “[W]e suggest our users withdraw their funds asap.”

The team announced that all raised and unused funds, along with third-party contractor payments, will be “covered” in the next two weeks, indicating that relevant parties will be made whole. The protocol will also open-source its codebase, allowing others to continue building solutions on it.

Everlend’s roadmap for the coming months included the launch of its governance platform and money market. The protocol was ounded in 2021 and its investors included GSR, Serum and Everstake Capital.

According to DefiLlama, Everlend held almost $400,000 in total value locked (TVL) at its peak. However, the protocol suffered a significant decline in the wake of FTX’s collapse, which had a negative impact on market liquidity. 

Everlend is the second Solana-based DeFi protocol to shut down within a few days due to crypto winter. On Jan. 27, Friktion platform announced it would be closing down its user interface, citing a “tough market for DeFi growth.” 

The move came nearly a year after Everlend announced it had raised $5.5 million in a funding round. In November, the company even launched undercollateralized lending targeting institutional investors’ demand for DeFi, shortly before FTX contagion struck.

5 altcoins that produced double-digit gains as Bitcoin price rallied in January

Bitcoin’s strong monthly performance translated to outsized gains in APT, GALA, T, MANA and SOL, making them the top performing altcoins in January.

The rally in cryptocurrency markets started in early January with a spike in heavily-shorted altcoins and Ethereum (ETH) liquid staking derivative (LSD) tokens due to the upcoming network upgrade in March. Soon gains started to show across the board as buyers started to play catch up. 

The improving macroeconomic conditions, such as reduced inflation and a stable job sector in the United States, provided additional tailwinds for the positive rally. Bitcoin (BTC) is en route to its most impressive closing for January since 2013. Its price has gained 40% year-to-date from the opening value of $16,530.

Another important catalyst for January’s rally was a short squeeze across the crypto market. After the FTX debacle and the lack of bullish narratives for the niche space, most investors expected growth to slow down in 2023.

There are unresolved issues such as potential Digital Currency Group fallout, geopolitical tension between Russia and Ukraine and recession risks due to the Fed’s aggressive quantitative tightening policies. Thus, most traders didn’t expect strong price rallies so early inthe year.

As it turns out, negative sentiment and crowded positions in the futures market continued to fuel more upside. There’s a strong chance of a pullback soon after steep gains. It remains to be seen if the pullback levels are attractive enough for buyers to turn it into a medium-to-long-term bullish trend. Let’s take a look at the top performing cryptocurrencies for January.

Top crypto market gainers in January. Source: CoinMarketCap

Aptos (APT)

Launched in October, Aptos is a relatively new blockchain in the space that leverages the technology of Facebook/Meta’s discarded crypto project, Libra. It carries significant face value based on its executive team, composed of former Meta engineers who also built the Move programming language to make the chain scalable and decentralized.

While the project carries much reputation, its fundamentals do not justify the price. The disbelief among investors is part of the reason behind the APT price rally. A market capitalization of $3 billion for a four-month-old project has surprised many onlookers. There’s also suspected market manipulation in the APT/KRW pair on Upbit, giving rise to the Kimchi premium. It is difficult to pinpoint a specific factor driving its demand in South Korea.

APT/USD broke above its previous peak of around $10, recorded around its launch. Technically, the token is in price discovery mode right now. Thus, there are few sell-side resistance levels besides the latest peak of $20 and the psychological level at $25. Unless the positive catalysts in the negative funding rate for perpetual swaps and the Kimchi premium cool off, the rally may still have wings.

But the token’s relative strength index (RSI), a price momentum indicator, has spiked to oversold territory, suggesting the possibility of a pullback. The moving average convergence divergence (MACD) indicator shows a slight bullish deviation with a less steep rise in the metric compared to the price. Still, the presence of buying volume is reassuring for APT bulls. The support for the token lies at $14.75 and $10.40.

APT/USD daily price chart with RSI and MACD indicator. Source: TradingView

Gala (GALA)

Similar to Aptos, Gala (GALA) also benefited from the excess negative positioning in the futures market. The gain in GALA/USD from $0.02 to $0.07 can be primarily attributed to wipe out of short positions.

GALA price (yellow) and funding rate. Source: Coinglass

The token suffered significant inflation of around 17,123,286 GALA daily, which accounts for around $28.2 million monthly at current prices. This raises concerns that the recent price pump could be short-lived.

On Jan. 25, Gala’s team introduced a new roadmap of the project in which they seek to update the tokenomics to reduce inflation and introduce a new burn mechanism. They are working on an independent Gala chain, where GALA tokens will be used to pay transaction fees.

On top of that, the daily issuance of GALA may also reduce after a vote is passed to change the time-based halving schedule to a supply-based one, bringing the halving closer than July 21.

The upgrade announcements have added to the buying pressure in GALA/USD, evident in a spike in buying volume. The token is trading above its 200-day exponential moving average at $0.052. If buyers build support above this level, the price can run toward the July 2022 breakdown levels near $0.164.

GALA/USD daily price chart. Source: TradingView

Threshold (T)

Threshold was born from the merger of two projects, Keep Network and NuCypher, which have combined their technologies to build a decentralized bridge network. Node operators on the Threshold network stake the platform’s native T token and Ether to validate the transfers between Bitcoin and Ethereum. This technology was borrowed from Keep Network, while NuCypher adds a layer of privacy to the protocol.

In January, the project’s native token nearly tripled in price, benefiting from the v2 launch and Coinbase’s listing announcements. The upgraded version of the Threshold protocol will enable tBTC (threshold Bitcoin) mints on Ethereum, which are backed by Bitcoin and pegged 1:1 to the BTC price.

The beginning of tBTC mints on Ethereum via Threshold Network will likely increase the network’s total locked value (TVL), making Threshold nodes more valuable. Initially, the project will launch a semi-decentralized version, Optimistic Minting, and gradually move to a decentralized system of nodes.

There’s a significant market opportunity for Threshold after the dissolution of RenBTC. Wrapped Bitcoin (WBTC) currently commands a dominant share of 93.6% of the total Bitcoin bridged to Ethereum.

Still, the recent 190% increase is starting to show signs of a buy-the-rumor, sell-the-news type of event, especially factoring in the Coinbase-led rise. The support for buyers lies at $0.027, with the next level of resistance at $0.145.

Decentraland (MANA)

The metaverse-themed projects Decentraland (MANA) and The Sandbox (SAND) witnessed a revival of the VR narrative as Apple is rumored to be launching its VR headset collection this spring. More recently, the Decentraland team released its manifesto for the current year, with a focus on growing its developer and creator community.

While Decentraland is one of the earliest metaverse projects with a massive opportunity to capture the future Web3 market, the present rally is showing overbought characteristics in the short-term.

The RSI indicator shows a reading above its bullish resistance. The MACD indicator shows a divergence with little to no-change in the metric to complement the Jan. 28 surge of 16.5%.

MANA/USD daily price chart. Source: TradingView

Nevertheless, the breakout above 200-day moving average and resistance from the FTX breakdown levels at 0.70 is encouraging for technical buyers. It remains to be seen if the surge was a just stop hunt of short orders or stemming from actual demand. Support for the token lies at the 50-day EMA, current at $0.54, and 2022 lows of $0.27.

Solana (SOL)

Solana (SOL) benefited from excessive negative sentiment around the blockchain’s future. The price rally was a classic case of a short squeeze in the futures market. While the fundamentals pointed toward a death spiral in its price, the market played out differently. By leveraging low liquidity conditions, buyers were able to push the prices higher until few sellers remained.

The market maker and venture capitalist entity, Alameda Research, was the primary source of liquidity for Solana’s DeFi projects. It was also one of the largest backers of its ecosystem projects. The DeFi community will face significant challenges within Solana due to a lack of liquidity.

Solana developers and the foundation have been working hard to make the network stable and more decentralized. While the network remained stable through the FTX debacle, it appears to have lost the market’s trust thanks to frequent downtimes. Moreover, Alameda/FTX owns around 10.7% of the total supply of SOL, which will likely add to the selling pressure for the next few years.

Their NFT space, while placed second in terms of trading volume across blockchains, is starting to see the departure of top performers like DeGods, y00ts, and most recently, F Studio. It remains to be seen if the community can build back up. The task will be challenging without the support of its most prolific backers.

On long timeframes, the $30 level is a crucial resistance and support level for SOL/USD. If buyers consolidate above this level, the positive momentum in the token’s price will likely stretch into Q1 2023. However, given that the rally is mainly driven by a short-side wipeout in the futures market, there’s a higher likelihood for a significant correction, followed by a period of accumulation, until a meaningful run can take form.

Last but not least, the LSD-narrative tokens deserve a mention in the monthly winners list. The native tokens of Ethereum LSD platforms nearly doubled in price across the board thanks to the upcoming Shanghai upgrade.

The Frax DAO was the highest gainer among LSD tokens, benefiting from a strong rise in the staked Ether on its platform. The platform is able to attract liquidity by providing additional yield on staking ETH through leveraging its position on Curve Finance.

The Frax DAO is the largest owner of CVX tokens, which gives them priority control over Curve emissions. Currently, staking frxETH on Curve earns around 9-10% annual yield, which is two times higher than the average LSD yield of around 4%.

Given that Ethereum’s Shanghai upgrade is still a month away and there’s room for growth of LSD platforms, the attention toward LSD tokens could likely sustain through February.

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