Solana Gains Momentum with $250M USDC Infusion from Circle

12 July 2024

in Solano

Reading Time: 4 mins read

Soon after Circle announced a partnership to integrate its Cross-Chain Transfer Protocol (CCTP) into the Solana blockchain, $250 million worth of USDC has been minted.
Analyst believes that this, coupled with other factors could propel the SOL price to $900 by the end of the bullish cycle.

It can be recalled that stablecoin issuer Circle recently announced a strategic partnership with Solana (SOL) to integrate its Cross-Chain Transfer Protocol (CCTP) into the blockchain ecosystem. As explained, this was meant to ensure a seamless bridge of frictionless Real-World Assets (RWAs).

At the time of this announcement, Circle disclosed that boosting liquidity on Solana is one of its core missions for the year. Just as promised, $250 million worth of USDC was minted on the blockchain on June 10, adding fresh liquidity to boost the activities of market participants.

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As we earlier reported, CCTP was created to ensure a smooth and secure transfer of USDC between different blockchain ecosystems via the native burn and mint process. Its integration in the Solana blockchain implies that developers could swap USDC tokens from Ethereum and the EVM-compatible ecosystem. It is also important to note that this equally supports non-EVM blockchains.

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Soon after this announcement in March, investors reacted significantly to drag the SOL price to $190. However, the asset could not sustain its bullish momentum as it dropped as low as $125. At press time, the asset was trading at $135 after surging by 7% in the last seven days and declining by 5% in the last 24 hours.

Solana (SOL) Price Analysis

Commenting on this, analysts disclosed that the ongoing development coupled with the Solana ETF traction could drive the price up. Our review of this prediction using the Supertrend indicator shows a validated buying signal with a possibility of an upsurge to the $160 mark.

Similarly, the Moving Average Convergence Divergence (MACD) supports the uptrend hypothesis as it shows a positive reading. Agreeing with the bullish prediction is analyst Ali Martinez, who observed the formation of a 2021 pattern. According to Martinez, SOL could likely hit above the $950 mark by the end of the cycle.

Crypto analyst Daan de Rover sided with Martinez, stating that SOL recorded a staggering surge of 1,100% from July 2021 to November 2021. According to him, the current weekly time frame chart of SOL shows that it is replicating the November 2021 descending triangle pattern.

Analysts explain the descending triangle pattern as a continuation pattern that usually leads to an upsurge. From the chart above, the base of the triangle is acting as a support zone between $120 and $130. To him, SOL could likely go beyond $800 if it breaks above the descending trendline.

However, a move below the $120 mark could invalidate the bullish scenario. In the bullish case, the analyst expects the Jump Crypto team to act as the catalyst as they seek to build the new Firedancer client for the ecosystem.

An engineer at Jump Crypto stated:

Of course what you are not seeing here is that Firedancer built another 3 blocks after this, got skipped, then detected that it had mismatched against the rest of the cluster, and then summarily shut down (gracefully, of course)…Fixing that is a tomorrow problem! Still a ton more to do, but hey at least you can see it on the blockchain now!