Solana’s Surges: Which Cryptos Will Follow Next?
Predicting the Next Wave! Explore in-depth analysis of the latest Solana rally and the potential next big cryptocurrencies
Today we will discuss the current Solana rally and the ongoing explosion in the market.
I want to clarify that we won’t be discussing buying Solana or which coins in the Solana ecosystem are currently popular. Everything in the market is highly inflated at the moment.
Instead, I will cover what I believe will be the next rotation of liquidity in the market.
This involves understanding where current speculators in Solana are taking profits, especially those in the ecosystem from early on, and where they are likely to move next.
I believe this is a more attractive and crucial play, so that will be our focus today. Everything I cover here today in this article is for short to medium-term swing opportunities. This piece will especially be relevant if you’re fearing FOMO and planning to take any positions due to the current price surge.
And just to be clear at the beginning, I continue to be bullish on Solana (SOL) over the long term irrespective of the short-term volatility that's imminent.
Solana Ralies
First, let’s address the current position of Solana. It’s starting to look like a really good time to start taking profits. The chart, even on the 4-hour timeframe, shows significant gains of around 12%. If this momentum continues, we could see up to a 50% increase in a single day, which is not sustainable.
If I still had any Solana at this point, I would definitely be taking profits and at least waiting for a pullback before buying it more. The risk-reward ratio no longer seems favorable to me.
The Current State of Solana: Is It Time to Invest?
Are you having FOMO?
While Solana has been performing well, it’s important to note that I don’t condone being too interested in it for the short term, especially when compared to other opportunities. Similar to when Chainlink rallied to $15 recently, I didn’t find it particularly appealing due to its aggressive growth.
Solana had been consolidating since November 1st, and I was watching it closely for a breakout. When it broke out on the 7th, I took profits in the 50s, which I consider a good enough profit.
What’s Happening in the Solana Ecosystem?
Many people on Twitter are talking about the Solana ecosystem’s significant gains.
You can verify this by looking at the various projects within the Solana ecosystem on CoinGecko. Most of them have seen substantial increases in value, and this excitement is driving the liquidity within the ecosystem.
The surge in the Solana ecosystem extends beyond the primary coin to include altcoins such as Bonk and Radium, which have seen substantial gains. I had covered these in my altcoins for the month and last which you can check out. Folks who got in soon would be sitting on a good profit in a short time.
Should you be getting in now in these? The answer is NO. Solana and the ecosystem coins are poised for a correction after which you can consider taking positions. Currently, it is largely driven by speculative trading rather than long-term growth potential.
This pattern is consistent with past market behaviors, indicating that the current focus on the Solana ecosystem will soon shift.
Where is the money flowing Next?
(Consider this Before Next Week. This will not be applicable after that)
Now, let’s discuss where I believe the money will flow next.
This rotation of money to different ecosystems is a common occurrence at this junction of the bull run. In the past, we’ve witnessed similar rotations between Solana, Luna, and Avalanche (AVAX) in the previous cusp of bull runs of late 2021 and prior.
This happens because the crypto market is driven by sentiment and traders and degens looking for on-chain opportunities. When one ecosystem becomes overbought, traders move to the next.
In the current market, Solana is the center of attention. However, I believe it’s time to focus on the next potential hotspots.
These shifts can happen quickly, so it’s essential to stay ahead of the curve.
So liquidity will flow into Polygon, Avalanche, and Arbitrum ecosystems.
I’ve entered a trade in Avalanche at around $14.50, with a stop loss at $12 and a take profit target of at least $20. Avalanche and Solana are both considered Ethereum killers, and historically, money has flowed between these ecosystems during bull runs.
In addition to Avalanche, I’m closely monitoring the Arbitrum ecosystem. Arbitrum is a Layer 2 solution for Ethereum, and it has an incentive program that attracts swing traders. I’ve also entered a trade in Arbitrum as I believe it has the potential for significant growth in the next week.
Focus on the top projects within these ecosystems to maximize your investment opportunities as well.
So case in point: AVAX and Arbitrum (and possibly MATIC) and the coins which operate exclusively on these networks will be The Emerging Focus this week and the next week
If we want to go deeper into these ecosystems, we can look at specific altcoins within them. In the Avalanche ecosystem, I’m interested in GMX, Radiant Capital, Benqi Protocol, Trader Joe, and Camelot.
These projects are either decentralized exchanges or lending and borrowing platforms exclusively built for the Avalanche and Arbitrum ecosystem. They have the potential to perform well as liquidity flows into the ecosystem. Arbitrum is attractive because it’s popular among DeFi traders, and the incentive program is boosting yield percentages.
Despite AVAX’s overall growth, these particular platforms are still undervalued, so there is potential for significant returns.
Similarly, in the Arbitrum ecosystem, platforms linked to Ethereum, like GMX and Radiant Capital are poised for a breakout as well.
Polygon?
Beyond AVAX and Arbitrum, Polygon (MATIC) also emerges as a contender, especially with its impending upgrade to Polygon 2.0 and the rebranding of its MATIC token to POL. Polygon has undergone a token upgrade to become the Polygon (Pol) token, with new tokenomics. While Polygon’s ecosystem is not primarily DeFi-focused, the rebranding and token upgrade are going to attract attention.
Do pay attention to the process. These ecosystem rotations only happen a few times. Usually, by the third time it occurs, it dies completely.
This is because everyone is still very enthusiastic about the Solana ecosystem, and they’re willing to invest in Solana altcoins. When these people move on to AVAX, they’ve already witnessed the rise and fall in the Solana ecosystem, so they want to make the rotation much faster. They invest in the top AVAX altcoins, and once they see gains, they are likely to exit quickly and move on to the next chain, whether it’s Arbitrum or Polygon.
This process becomes faster as people become more accustomed to this way of trading. That’s why I wouldn’t recommend getting into very small ecosystems.
Staying ahead of these shifts is crucial for maximizing opportunities and profits.
Enjoyed this article? It would mean a lot if you could give it a clap and follow for more content like this🌟
I’ve meticulously compiled my years of cryptocurrency and trading experience into an eBook, ensuring a comprehensive roadmap for both newcomers and seasoned individuals alike, tailored for the 2024–2025 market cycle. Within these pages, you’ll uncover a treasure trove of techniques that have propelled my profits through previous cycles.
⬇ Don’t wait, click below to grab your copy now⬇
Rest assured, when this cycle concludes, you’ll be grateful to your past self for taking this step and seizing the opportunity.
