Below is a comprehensive overview of Solana (SOL), which is trading – at the time of writing – near $151.71. Please note that numbers and data can change rapidly in the cryptocurrency market, and that the following is not investment advice but general informational material.
A quick overview of Solana
• Launched in 2020, based on a consensus algorithm that combines Proof-of-Stake and Proof-of-History, allowing for block times of around 400 ms and theoretical capacity exceeding 65,000 transactions per second.
• Known for its low fees (under one cent per transaction) and being a hub for many DeFi and NFT applications, and recently the meme-coin wave.
• The market cap currently exceeds $68 billion, making it the fifth or sixth largest digital asset depending on the tracking platform used.
Price performance in recent months
• At the beginning of 2023, the price was around $10–15, touching $200 at the end of 2023 before retreating with the market drop at the start of 2024.
• The lowest annual low so far recorded in January 2024 near $78, meaning that the current price represents gains of about +95% since that low.
• The all-time high still stands at $260 (November 2021).
Fundamental factors supporting current momentum
A. On-chain activity: The number of daily active users has risen to between 800,000 and 1.2 million accounts, sometimes surpassing Ethereum in actual transactions (not aggregated).
B. DeFi liquidity depth: The total value locked (TVL) has returned to the range of $4–5 billion compared to only $200 million a year ago.
C. Firedancer update: A validator client developed by Jump Crypto promises to enhance performance and stability and introduce true parallelism in 2025.
D. Meme-coin wave: BONK, WIF, and others attracted trading volumes exceeding $2 billion on some days, increasing the demand for SOL for fees and liquidity.
H. ETF speculation: After the filings for spot Ethereum ETFs in the US were raised, there is now speculation – even if long-term – about other L1 assets.
Brief technical overview
• Overall trend: Still bullish as long as the price maintains the 50-day moving average (currently around $143).
• Potential resistances: $160, then $175–180, then $200.
• Significant supports: $140, then $128, then $110.
• The daily Relative Strength Index (RSI) hovers around 58, which is within a ‘neutral to slightly positive’ range after cooling from last week's short-term overbought condition.
Risks to be aware of
• Network congestion: Intermittent outages or loss of some transactions continue to raise concerns among investors, despite improvements in versions 1.18 and beyond.
• Staking concentration: Despite the expansion of the number of validators (≈ 2,500), about 25% of the total stake is held by ten major validators.
• Regulatory environment: The SEC lawsuit against major exchanges mentioned SOL as a 'potential security,' which could create future pressures or restrictions within the United States.
• Bitcoin volatility: The positive correlation between SOL and BTC remains around 0.8; any sharp drop in the parent asset quickly reflects on Solana.
3–6 month scenarios (non-binding hypothetical)
Conservative scenario: Continued fluctuation between $120 and $180 waiting for greater clarity in US regulations or the launch of Firedancer on the public test network.
Optimistic scenario: Successful upgrades, a return of risk appetite, and the price reaching levels of $220–250, especially if Bitcoin breaks its peak again.
Cautious/negative scenario: Regulatory tightening or technical failure leads to a break below $110 and possibly a return to the $80–90 range.
Summary
Solana benefits from a mix of technical innovation, high user activity, and attractive speculative flows. However, it remains heavily influenced by the overall market state and regulatory risks. Any investor is advised to do their own research, determine the appropriate level of risk, and not invest amounts they cannot afford to lose.
Disclaimer: This content does not constitute a recommendation to sell or buy and should not be relied upon for financial decisions. Trading in cryptocurrencies is highly risky and may result in the total loss of capital.
