After a 3-year battle, Ripple (XRP) has won (partially) the lawsuit by US SEC confirming it to be not a security for retail investors in the US market. This is a significant milestone for key altcoins that were termed securities by the SEC last month – especially Solana and Polygon.
Coinbase, a US-based listed exchange, has announced a restart of XRP trading on its platform as a result.
This month, even before the court’s decision was announced, SOL and MATIC have been doing relatively well. Today we track key trends on these particular altcoins.
Strong price action leads to a stronger rally for SOL and MATIC
In the last few weeks, SOL and MATIC have performed considerably.
MATIC broke a key resistance zone and tested it as support (yellow line) before it zoomed ahead today. It is currently encountering another resistance at its 20-week moving average (MA) that it must breach for the continuation of the rally.
MATIC/USDT pair. Source: TradingView
SOL, on the other hand, was already trading above its key moving averages and has now zoomed past its previous local high of around $25 (yellow line).
SOL/USDT pair. Source: TradingView
The rallies in both assets have been accompanied by strong volume. The euphoria around today may eventually wean but both look good technically in the longer term.
Ecosystem development and partnerships have helped their case
The launch of Polygon 2.0, including a new governance token POL that will replace MATIC eventually, has excited Polygon investors. With Polygon 2.0 proposing features and capabilities that are poised to revamp and restructure the entire architecture of the Polygon ecosystem, market sentiments are largely bullish for network developers, Polygon traders, and crypto investors.
According to Santiment, the MATIC whales holding 10-100 million tokens have entered into an accumulation mode. These whales have collectively amassed close to 26 million MATIC since early July.
The catalyst for Solana seems to be their new partnerships and the upcoming launch of Firedancer, a validator developed by Jump Crypto.
Firedancer is highly anticipated due to the immense scalability benefits that it could bring to Solana. In a recent performance demo, validators running Firedancer were able to process more than 1 million transactions per second (TPS), far exceeding the processing capabilities of any blockchain in production today (including Layer 2s). A successful production rollout could position Solana as a go-to chain for building high-throughput, computationally intensive applications.
Solana’s NFT push has got bigger with its partnership with Coca-Cola in Serbia. Solana’s NFT ecosystem has remained a bright spot for the network despite a broader slowdown in NFT volumes. Per CryptoSlam, Solana facilitated $71.4 million in NFT trading volumes in June, the third highest of any network, behind Ethereum and, more notably, Bitcoin, which has seen a rapid explosion in interest with Ordinals. Solana Labs is also actively working on AI tools to aid prospective NFT buyers in deciding which collection best fits their preferences.
Regulations are expected to become favourable
If Solana and Polygon get sued by the US SEC, they have Ripple’s case as an example to fight them. The emergence of POL may have been a reaction to MATIC being termed security. Solana’s devs ruled out something similar (a hard fork).
Now, both communities will be encouraged to spend their efforts on actual development than worrying about its regulatory impact. The US crypto investor base is significant – Ripple’s market cap grew $18 billion in a matter of hours today. The continued trade of these assets in US markets will strengthen its already strong ecosystem.
Key takeaway
These are promising signs for key altcoins and their investors who have lost considerable value in the last 2 years. Solana and Polygon are leading altcoins which will benefit from a growing ecosystem in the medium term. However, the impulse rally today may already be in its last leg. A retracement back to lower levels in the upcoming weeks is likely for both assets.
In case you have been accumulating these altcoins – congratulations! Remember to take some profits.
Others, wait for key support levels to grab a position. As always, remember our key strategy – invest most crypto capital in Bitcoin and Ethereum while you dabble with these altcoins.
