Why Solana Hasn't Reclaimed Its ATH:
1. High Circulating Supply: With over 549 million $SOL tokens in circulation, achieving significant price increases requires substantial demand.
2. Inflationary Tokenomics: Solana's annual inflation rate is around 4.5%, gradually decreasing over time. This continuous increase in supply can exert downward pressure on the token's price.
3. Smaller Ecosystem: Despite its technical advantages, Solana's ecosystem remains smaller compared to Ethereum's, limiting its adoption and, consequently, its price appreciation.
4. Whale Activity: Recent market activity indicates that major cryptocurrency whales are offloading their Solana holdings, leading to increased volatility and reduced investor confidence.
5. Limited Institutional Interest: While Solana has garnered attention from institutional investors, it has not seen the same level of interest as Bitcoin and Ethereum, potentially limiting capital inflows into $SOL .
Conclusion:
Solana's struggle to reach new price highs can be attributed to a combination of factors, including its market capitalization and supply dynamics, inflationary pressure, limited ecosystem development, whale activity, and comparatively lower institutional interest. While the network's technical capabilities are impressive, these fundamental challenges must be addressed to unlock SOL's potential for sustained price appreciation.
Disclaimer: I’m not a financial adviser. Just sharing my personal view — DYOR (Do Your Own Research) before investing.
