Solana suddenly increased in price after it announced its new feature that will go live on Tuesday. Many traders are focused on the SOL/USD pair causing the prices to rise on Monday as they wait for the new feature launch.
The rally pushed the SOL/USD exchange rate to a new all-time high of $103.06. This happened just a few days after Solana talked of social media’s ‘Ignition’ feature. Even though the company spoke of the new feature, it has not given its community all the details yet. That means there are high chances that it will burn the SOL tokens in the process.
The speculations are based on the ignition teaser video where there was a purple flame lighter.
What does the Ignition feature mean?
The Solana blockchain took the market by a storm and currently holds many crypto projects, DeFi and NFTs. Solana is fueled by the SOL token that is used for staking and transactions. Unlike other systems, Solana burns part of the SOL so that the limit does not exceed 500,000,000.
Since Solana aims to remain dis-inflationary, it creates new tokens for its issuance declines systematically once it attains its highest value. Solana does this to stabilize the supply at a predetermined long-term inflation rate.
If Ignition were a token burn, even as speculated, it would get so much publicity to the extent of being on a landing page of the official website. This is based on the fact that it held several burning events in the past and made no buzz about them.
The Ignition event might be more extensive since the caption indicates so. The caption” The sky is the limit, what will you launch?” shows that it is an event that will give people the chance to launch what they want. Mostly DApp developers and NFT creators. The ignition period will be between Aug 31st to Oct 8th.
Traders are taking advantage of the Ignition as a way of raising their bids. Since the official announcement on Friday, SOL/USD jumped by 17.62%. On Saturday it jumped further by almost 10%.
On Sunday, it was much relaxed as the price dropped by 1.5% though it still maintained at $100. This pushed SOL to be among the top ten cryptocurrencies, attaining the tenth position.
What does the future hold?
The crypto market is experiencing an overall rebound situation. There is so much optimism with Solana. There is also a plan to create a Solana-dedicated fund for institutional investors. The Solana blockchain is gaining momentum fast.
However, its current relative strength index indicates that it may be headed for a short-term correction soon.