Investing.com – With over 22% gains in 24 hours and nearly 30% in a week, this cryptocurrency is by far the best performing cryptocurrency in the top 20 as of Wednesday morning, while the rest remain stable since yesterday days and add hardly more than 1% in the last 7 days.
Thus, at 4 a.m. CET on Wednesday, it peaked at $14, its highest level since December 16. Note that between the Dec. 29 low at $8.09 and this morning’s high, Solana is up more than 73%.
Solana (SOL) Recovers From FTX Bankruptcy Shock
Recall that earlier SOL suffered more than other cryptocurrencies from the FTX bankruptcy scandal due to Solana’s close ties with Sam Bankman-Freed. The cryptocurrency did drop 71.7% between a peak of $38.75 on November 5 and a low of $10.96 on November 22.
In a note earlier this week, analysts at Bernstein noted that “Solana has been hurt by FTX becoming its biggest champion and biggest investor,” explaining that “Solana’s many DeFi applications were participating in FTX early on. which led to the evaporation of its DeFi ecosystem during the decline of FTX and the judgment that “Solana needs to recover” and “now needs to play a more organic game by attracting motivated developers.”
BONK project fuels interest in Solana
However, recent news shows that a “remodel” is in the market for Solana. Indeed, much of the hype in the Solana ecosystem over the past few days has been centered on the rise of BONK, a Solana-based meme token that seeks to compete with (DOGE) and the (SHIB)-based token.
BONK was launched in late December through a large-scale giveaway, when free tokens were sent to the wallets of a wide range of Solana developers and NFT faucets. In the last 24 hours alone, Bonk’s online transaction volume has exceeded $13.7 million and the price has risen by 73% in 24 hours, which also benefits Solana, whose blockchain is used by BONK.
According to data from Coinglass, the recent surge in prices has been reinforced by a “short squeeze”, as evidenced by the rise in short liquidations.
Bernstein wary of Solana’s future
However, according to Bernstein analysts, not everything has been won for Solana. They did note that “as Ethereum becomes more than just a blockchain and ecosystem efforts are managed by multiple layer 2 teams (Polygon, Arbitrum, etc.), the competitive landscape for Solana is getting tough.”
As such, they wondered if Solana could “find a new niche” by suggesting a possible specialization “in payments through its Solana Pay/Solana Mobile efforts” and warning “that the crypto community will ask for more proof of the independent developer ecosystem and more proof of innovation.” before trust is restored.”