Popular analyst Jay Freed says that Solana price performance in 2022 will follow SOL’s phenomenal path in 2021 and could rise at least 700%.
Reason 1: Institutional Investors
According to Trader, Solana’s (LEFT) The primary reason it will continue to rally in 2022 is support from institutional capital through private investment funds.
“A combination of price hikes and inflows has increased Solana’s assets under management to $97 million, making it the fifth-largest investment product.”
Solana also has the backing of popular cryptocurrency exchange FTX, which has launched several Solana-based projects. FTX is also one of the biggest investors in Solana, along with Andreesen Horowitz and Polychain.
Besides that, it is included in the portfolios of many well-known investors, including SOL, Multicoin Capital, Sino Capital and others. One of the reasons for Solana’s exponential returns next year is that these big and influential investors are backing the project with an “Ethereum killer” narrative.
Reason 2: Critical Role in DeFi
The trader’s bullishness about the project stems from Solana’s important role in the DeFi ecosystem.
“Solana’s DeFi ecosystem is expanding rapidly with several high-end projects vying to become the blue chip of the network.”
Freed emphasizes that Solana “provides all the grounds to be the DeFi-focused Tier 1 project of the future.” Fast block times and a Proof-of-History mechanism avoid pre-running, and node scalability means the network can theoretically avoid congestion and keep transaction costs low.
Reason 3: GrayScale’s Support for Solana
More importantly, Grayscale, a leading institutional investor, has added Solana to its flagship product, The Grayscale Digital Large Cap Fund.
According to the investor, the fund acquired Solana by selling some of the other assets in the fund. Grayscale has reduced its Bitcoin allocation by around 5% since the last rebalancing.
“The rebalancing highlights how Solana has become a crypto market favorite. The Solana blockchain is becoming a high-speed, low-cost competitor for Ethereum as well as a competitor for Cardano, Polkadot, and Binance Smart Chain.”
Price Potential
According to Freed, both the daily and weekly charts show an interesting but bullish trend for Solana price. Specifically, the daily time frame shows SOL up 713 percent between mid-July and September 8. The chart is the first element in a bullish pennant pattern. flag pole created.
Also, Freed points out that the uptrend and subsequent consolidation from July to October 20 is a continuation pattern known as the bullish pennant. As a result, the trader can see that this technical formation with flag pole Marking its distance from the breakout point at $164, he forecasts SOL to rise 713 percent to $1,336.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.