- Solana project Solchat makes an impressive comeback after months of continued decline.
- Massive capital inflows into the market signal the potential start of a recovery.
Solchat, a project in the Solana (SOL) ecosystem, is making headlines thanks to the impressive performance of its native token. CHAT has been on a long downward spiral, but its recent performance indicates a change in fortunes.
CHAT’s initial rally saw it peak at $21.28 in mid-March earlier this year. However, it has since turned bearish, but the selling pressure appears to have slowed in August, resulting in a new all-time low of $0.459 on August 5.
CHAT has fallen 97% from its peak to its recent lows.
The steep price discount paved the way for robust accumulation this month. As a result, the bulls are back in full force, leading to an impressive rally.
CHAT has had an impressive performance over the past 7 days, during which it has gained 344% to reach a new local high of $2.77.
Source: TradingView
At press time, CHAT stock was trading at $2.39, a slight pullback from the recent local high. Bulls have encountered resistance at recent highs, suggesting the possibility of a slowdown.
Price was also extremely overbought at recent highs, which could provide further downside potential if profit-taking intensifies.
Can CAT Bulls Maintain Their Rally?
A prolonged rise is possible if CHAT manages to attract more attention and accumulation. Its recent rally could potentially draw attention to the Solchat project.
This is one of the Solana protocols that has a specific and interesting use case. It is the first blockchain-based decentralized communication protocol on the Solana network.
The recent arrest of Telegram’s founder has highlighted the need for censorship-resistant communication protocols such as Solchat.
These factors, along with its unique first-mover advantage as a decentralized chat platform on Solana, highlight a unique selling point that can drive its long-term performance.
Despite its recent rebound, CHAT remains heavily discounted. It is still far from its historical ATH, hence the perception that it is still undervalued which could work in its favor.
Solchat has gained around $15 million in market cap over the past few days, propelling it into the top 800 projects by market cap.
Source: Coinmarketcap
CHAT has arguably been one of the best performing cryptocurrencies over the past 7 days. Its ability to gain over $15 million in market cap in such a short period of time could signal the start of its recovery phase.
If that is the case, then CHAT could be poised for an impressive rally in the coming months.
