Solana (SOL) recently increased by 250% to $25, which shocked many investors in the encryption market. At the same time, investors concerned about the negative asset interest rate of SOL in the futures market are likely to predict the bullish market first.

The main reason is that the excessive negative asset interest rate, as shown in the figure, represents that most investors are all short orders, which brings stock stop loss opportunities to customers.

Whatever is behind the price rise, if enough customers are interested in adding the bullish ranks, it may turn into a bullish development trend in the medium and long term. However, Solana's fundamental and market demand analysis shows weakness, which is more likely to cause a substantial adjustment of altcoin.

Solana found a meaningful competitor in the NFT industry

Solana ranks second in the NFT trading level of the blockchain platform. Ethereum accounts for 81.6% of the total market share of NFT transactions. According to the statistics of Delphi Digital, Solana ranks second with 11.6% market share.

However, when DeGods and y00ts, two major projects, decided to leave Solana, the ecosystem was frustrated. The departure of top new projects opens a bad example for commodity developers who are looking forward to releasing NFT. So far, ETH is still the best choice for well-known brands and community projects.

In addition, after establishing important partnerships with Reddit, Starbucks, Meta and other brands, Polygon has gradually gained attention. DeGods also chose Polygon instead of Solana after obtaining the support of $3 million from Polygon Laboratory. Polygon's project development team has been recognized as the best business team.

The application data of Polygon and Solana from Nansen confirmed this change, that is, the number of active users in Polygon has increased sharply, while the use of Solana has been declining since mid-2022.

Solana has performance evaluation and trust problems

Solana's Internet became increasingly unpopular last year, due to frequent and long-term network disruption and hacker intrusion. In 2022 alone, there will be more than five shutdowns. JumpCrypto, a market-making stock fund, put forward a solution, that is, to develop a backup data verifier mobile client, Firedancer. Its information authenticity needs to be tested.

The total network cost indicator is one of the most powerful indicators for analyzing the theme activities of the platform. Solana's token terminal device data shows the downward trend of network activity. Since 2022, active users on Sundays have been decreasing every quarter.

In addition to the collapse, the ecosystem has lost customer recognition due to large-scale hacker invasion. One of the largest data encryption system vulnerabilities in 2022 is the use of $312 million worth of worm bridge hacking. There was also an event in which $8 million in SOL flowed out of customers' wallets

After the collapse of FTX, trust was finally severely hit, because FTX Alameda is a large physical line supporting the Solana ecosystem. This bankrupt venture capital company and trading center has about 58 million SOL tokens, accounting for 10.7% of the total supply of Solana. Among them, 6.7 million SOLs will be opened every year by 2025, followed by 5 million SOLs in 2028. This position increases the risk of major sales.

The collapse of FTX also destroyed Serum, which is also the key liquidity origin of the new DeFi application. The failure of Mango Markets, a large decentralized exchange, has driven many DeFi customers away.

The bear market divergence of the stock market appears in the SOL/USD data chart

It is likely that the recent surge of SOL price from US $10 to US $25 is the result of short-term extrusion in the futures trading market. Moving average convergence divergence (MACD) indicator value shows bullish divergence on the daily SOL/USD data chart. Considering the relative strength index (RSI) of the mechanical energy in the sales market, it also moved to the oversold area, increasing the probability of further adjustment.

At this stage, the bullish trend is likely to continue to the friction resistance of US $33, which is also the collapse area of the FTX collapse, which is the current position of the 50-day index numerical average system.

The sky ratio of the market outlook still shows a slight bullish trend of 51.5% of short orders versus 48.5% of double heads. This may be the last period of increase in SOL/USD.

Conversely, raising the level of US $33 may lead to a surge to US $135. Unless Solana Charity Foundation, like Polygon, has established the most important strategic partnership, or shows improved application data information, the above situation seems highly unlikely.