This article explores the surge of Solana and the potential next “wealth code” to follow. Please note that this article is for reference only and is not investment advice. The article is based on the work of Subhashish C in his article “Solana’s Surges: Which Cryptos Will Follow Next?” and is compiled and organized by Bitpush.
Table of Contents:
1. The Rise of Solana
2. The Current State of Solana: Is it Time to Invest?
3. Do You Have FOMO?
4. What’s Happening in the Solana Ecosystem?
5. Where Will the Hot Money Flow Next?
6. Polygon?
7. Understanding Where Speculators in Solana Are Profiting
8. The Next Potential Hotspot
First and foremost, it’s important to note that regardless of short-term fluctuations, I remain bullish on Solana (SOL) in the long term.
Let’s start with the current situation of Solana. It seems like a good time to take profits. Even within a 4-hour timeframe, the chart shows a gain of about 12%. If this momentum continues, we may see a daily gain of up to 50%, which is unsustainable.
If I were still holding Solana at this point, I would definitely take profits and wait for a pullback before buying again. The risk-reward ratio doesn’t seem favorable anymore.
Do you have FOMO?
While Solana has been performing well, it’s worth noting that I wouldn’t bet heavily on it in the short term, especially compared to other opportunities. Similar to Chainlink’s recent surge to $15, I didn’t find it particularly attractive due to its aggressive growth.
Since November 1st, Solana has been consolidating, and I’m closely watching for a breakout. I took profits when it reached $50 on November 7th, which I considered a good enough profit.
Many people on Twitter are discussing the significant gains in the Solana ecosystem. We can verify this by examining various projects within the Solana ecosystem on CoinGecko. Most of them have seen a significant increase in value, driving liquidity within the ecosystem.
The surge in the Solana ecosystem is not limited to major tokens but also includes altcoins like Bonk and Radium, which have achieved substantial gains. I have increased my positions in these altcoins this month and the previous month, and early buyers will likely see substantial profits in the short term.
Should you buy now? The answer is no. Solana and ecosystem tokens are due for a correction before considering accumulation. Currently, it is primarily driven by speculative trading rather than long-term growth potential.
This pattern aligns with past market behavior, indicating that the current focus on the Solana ecosystem will soon shift.
During this stage of the bull market, rotation of funds among different ecosystems is common. In the past, we witnessed similar rotations between Solana, Luna, and Avalanche (AVAX) during the peak of the bull market in late 2021 and before.
These shifts can happen quickly, so it’s crucial to stay ahead.
Therefore, liquidity will flow into the Polygon, Avalanche, and Arbitrum ecosystems.
I entered an Avalanche trade at around $14.50 with a stop loss at $12 and a profit target of at least $20. Avalanche and Solana are both considered Ethereum killers, and historically, funds flow between these ecosystems during bull markets.
In addition to Avalanche, I’m also closely watching the Arbitrum ecosystem. Arbitrum is an Ethereum Layer 2 solution with an incentive program that attracts volatile traders. I have also made trades on Arbitrum as I believe it has significant growth potential in the coming week.
Focus on top projects within these ecosystems to maximize investment opportunities.
For example, AVAX, Arbitrum (possibly MATIC), and tokens specifically built on these networks will be the emerging focus this week and next week.
If we want to dive deeper into these ecosystems, we can examine specific altcoins within them. In the Avalanche ecosystem, I’m particularly optimistic about the potential of GMX, Radiant Capital, Benqi Protocol, Trader Joe, and Camelot.
These projects are either decentralized exchanges or lending platforms built specifically for the Avalanche and Arbitrum ecosystems. As liquidity flows into these ecosystems, they have the potential to perform well. Arbitrum is attractive because it is popular among DeFi traders, and the incentive program is increasing yields.
While AVAX as a whole is growing, the value of these specific platforms is still underestimated, so there is potential for significant returns.
Similarly, in the Arbitrum ecosystem, Ethereum-related platforms like GMX and Radiant Capital are also poised for breakthroughs.
Apart from AVAX and Arbitrum, Polygon (MATIC) has also become a competitor, especially as it is about to upgrade to Polygon 2.0 and rename its MATIC token to POL. Polygon has undergone a token upgrade, rebranding to the Polygon (Pol) token with a new token economy. While Polygon’s ecosystem is not primarily focused on DeFi, the rebranding and token upgrade will attract attention.
It’s important to pace yourself as ecosystem rotations occur only a few times. Typically, by the third rotation, the trend completely disappears.
This is because people are still very enthusiastic about the Solana ecosystem and willing to invest in Solana altcoins. When these people switch to AVAX, they have witnessed the rise and fall of the Solana ecosystem, so they want to speed up the rotation. They invest in top AVAX altcoins and will likely exit quickly once they see profits and move on to the next chain, whether it’s Arbitrum or Polygon.
As people become more accustomed to this trading style, the process will become faster. That’s why I don’t recommend entering ecosystems with a very small market.
Being one step ahead is crucial to maximize opportunities and profits in ecosystem rotations.