Solana’s High Volatility

A couple of days ago, the token of Solana’s protocol, also known as Sol, went through sharp fluctuations in price. Solana’s high volatility was due to a flood in the network that took place this week. The token fell more than 15%; later on, it regained a lot of the losses. The asset fell as low as $142.86 a few days ago, at which point, the crypto had already lost about 16% after getting the intraday high amount of $171.48. All of this is according to data from Messari. 

At the beginning of September, it reached a new high of $214.36. By the time of the last crash, it had already fallen a bit more than 33%. The token started recovering soon after, and at the moment of this writing, it was trading at $159.11. 

The Difficulties That Caused Solana’s High Volatility 

The network experienced technical difficulties, and it went down soon after; this was announced on September 14. That’s when most of that day’s action in price took place. Around 8 am that morning, the network had produced the last block, then a bit after 11 am, the CEO posted a tweet addressing the difficulties. The message stated that bots were flooding the network through a DEX that was happening on Raydium. The last being an automated provider of liquidity and market maker built on Solana. Then finally, at 3 pm, the Solana Twitter account gave an update. The post declared that the network experienced increased transactions, which saturated the processing channel and caused the web to start forking.

The Analysts Opinion

Even though it’s true that the price of SOL went down during this incident, it had been experiencing a downward trend before. More than one analyst concludes that today’s price action is a combination of standard profit-taking and technical difficulties’ impact. They say that after SOL’s price got to its overbought level, it was customary for it to go down because of profit-taking. 

Despite the unfortunate situation, analysts generally provided an optimistic view on the future prospects of Solana’s project. Of course, what happened will still impact the token price, but they’re also confident about its comeback. They don’t believe it will affect the cryptocurrency long-term and set Ethereum’s early years as an example. Although, they also made it very clear that the project needs to get the network running fast. They believe that because of Solana’s high volatility, they may have a perception issue in the near future if they don’t fix this soon.

Conclusion 

In this case, it has become evident that it is not the bug itself that caused Solana’s high volatility in the first place. Instead, people are more surprised that the reaction of the crypto community has come together to find a solution for it. Now the question is not if the Solana network will be able to fix it, but when. And when they do, it’s going to be soon enough for it not to suffer a lot of loss on the matter.

DeFi Net Value Approaches 200 Billion USD

How Did it Start?

The net value of DeFi went above $170 billion as other projects outside of Ethereum are becoming increasingly more vital. Despite the recent  $600 million hacks that cost Poly Network considerable money and an even more significant amount of users. The total value of decentralized finance got to an incredible USD 179.9 billion last week and is fast approaching the $200 billion mark. This is due to the significant momentum of growth that other DeFi projects, besides Ethereum, have been gaining during these last months. Currently, it’s Uniswap, the one dominating the second place with 3%.

According to the statistics, only during the last hours, the Total Value Locked (TVL) increased by 1%. It’s expected that it will keep growing at the same rate in the following days. After the already mentioned Uniswap, the decentralized finance app, Aave, is in charge of $16.04 billion, and Curve of $13.92 billion. This, considering that most of the TVL are actually locked into the reinforced app of Ethereum.

What About the Smaller Networks for DeFi? 

But nowadays, it’s not all about Ethereum. On the other hand, we have several other smaller networks contributing to the TVL. That is the case of Binance Smart Chain (BSC) that has a bit over $19.05 billion of the TVL. Terra follows BSC with 7.4 billion USD, then Polygon with 5.3 billion USD, Solana with a TVL of 2.36 billion. Not far below is Klaytn with a little over 1.29 billion USD total.

Other Platforms 

Now, we talk about the platforms for the exchange of DeFi; then we can conclude that Curve counts as the highest TVL. Currently, Curve has a TVL of 13.92 billion USD, and after it comes Pancakeswap 5.94 billion, driven by the BSC. And Uniswap, with a TVL of 5.3 billion USD. To set a better picture of the growth of decentralized finance, only for the chain of Ethereum, among 16 other different platforms of dex, statistics reflect that so far there was a total of 19 billion USD global worth of exchanges, only during the last week. Of course, Uniswap had the most considerable dex volume of them all, across all 16 platforms of dex, with 69.2%.

The Future

As you can see, Uniswap is the main dex of Ethereum. The statistics mentioned above prove that the decentralized exchange got about $12,952,621,793 in total trading transactions around the globe. A significant percentage of it comes straight from dex apps, but the rest is channeled through other aggregators of dex. Such is the case of 0x API, 1inch, Paraswap and Matcha. 

Another worth mentioning relevant statistic in the sector is the total of DeFi users or unique addresses in defi apps based on Ethereum. The last already went above the 3.3 million users. Today’s biggest loan apps include platforms like Compound, Aave, Anchor, Cream Finance and Venus respectively.

About Support and Resistance Levels

What are support and resistance levels?

The support and resistance levels are an essential tool to play a part in every financial market. Here is where the bullish and bearish forces collide, offer and demand, and only the winner prevails. It is the market makers setting these levels according to a trend. In simple terms, these are the levels where the price stops and continues with a different movement. Support is the level at which the price slows its decline to rise again. Resistance is the level at which the price stops growing and begins its descent.

Support and Resistance in Trading

The more times the price has carried out this behavior at these levels, the easier it will be to predict the price movement in the future. That is added to the fact that support and resistance levels are considered psychological levels. That is, traders tend to buy or sell at those points, which helps to strengthen them. Traders must pick the best positions to place their support and resistance levels; otherwise, the chart can turn out to be impossible to read. Also, it is essential to learn how to draw supports and resistances correctly.

What to Look After

One of the main problems when analyzing support and resistance is identifying the moment of change or break. While there are some accepted percentages, there is not a consensus. Given the high volatility of the markets, this has to be considered together with other indicators. It’s important to use supports and resistances as a signal and assess all circumstances affecting the value.

Advantages of Using These Indicators

We could name many advantages when we talk about using support and resistance levels. Let’s sum it up in three main ones. One, it’s easy to use; even if you’re a newbie in the world of trading, it will be easy to keep up with this. If you find yourself having difficulties, there are many online articles explaining how to work with it, such as this one. Second, well-defined resistance and support points can potentially save you from significant losses. And last but not least, adjusting objective purchase and sale prices and not being subject to news or rumors can help you remove the human error factor.

Conclusion 

In the end, we can conclude that every tool that you can use in your favor will be an ally in your quest to accomplish your goals. Although, that is no guarantee that you’ll end up becoming a millionaire overnight. It would be best if you tried learning about all these tools and constantly read about the markets. Also, you should never go straight into trades. Try testing yourself and your strategies first with a demo account. This way, you’ll be able to identify and correct your mistakes without suffering losses.