The cryptocurrency market is experiencing significant turbulence this week, with Solana (SOL) facing particularly steep challenges. As the excitement surrounding memecoins wanes, prices have dropped to their lowest levels in several months. Following the historic hack of the ByBit exchange and President Trump’s controversial tariff proposals, the overall crypto market has seen a downturn, with Bitcoin falling 12% in the past week. In contrast, Solana has plummeted 22%, reaching a new five-month low. Solana Struggles As New Data Shows Dramatic Drop As reported by Fortune, the decline in Solana’s value can be attributed to its association with recent celebrity-backed memecoin scandals, particularly the LIBRA incident. This cryptocurrency surged to a nearly $5 billion market cap before crashing, following promotion from Argentine President Javier Milei, whose involvement has sparked outrage and prompted an investigation. Related Reading: Avalanche (AVAX) Overextended—Is A Market Shakeup Imminent? Zach Pandl, head of research at the crypto asset manager Grayscale, noted that this incident has highlighted the volatility and risks associated with memecoins, stating, “The current phase of memecoin trading on Solana is over.” Solana’s rise as the preferred blockchain for memecoin development was largely due to its low transaction costs, high transaction speeds, and user-friendly infrastructure. Platforms like Pump.fun facilitated the rapid creation of cryptocurrencies on Solana, leading to a peak of over 71,000 memecoins launched in a single day. However, this number has since dwindled to just 26,000, according to data from analytics firm Dune. Analysts Warn Of Potential Drop Below $100 While many memecoins lack intrinsic value and are often linked to scams, Pandl suggested that the recent memecoin frenzy had some positive impacts on the Solana ecosystem. “It onboarded users, generated revenue, and helped stress test the Solana blockchain in various ways,” he explained. “In that sense, memecoin trading is one of the many building blocks to developing the next generation of financial infrastructure.” Adding to Solana’s woes, the open interest for Solana futures has declined by 44% over the past month, dropping from an all-time high of $6.39 billion to just $3.57 billion today. This decline indicates a reduction in investor confidence and interest in leveraging Solana positions. Related Reading: Panic Sell? Bitcoin’s $86K Fall Wipes Out $1 Billion In Trades CoinGecko data also shows a similar pattern from investors, as trading volume has dropped 54% in the last 48 hours, representing only $5 billion of Solana’s total market cap of $66 billion. Currently trading at $134, analysts have identified this price point as a crucial support zone in the ongoing downtrend. According to Crypto General, if this support fails to hold, the next support level could fall below $100, representing a drop of more than 65% from Solana’s all-time highs. Featured image from DALL-E, chart from TradingView.com
VanEck, a global investment management firm with a nearly 70-year history and a strong reputation in the exchange-traded funds (ETF) arena, has issued a striking price target for Solana (SOL). In a post shared on X on January 6, the New York-based firm projected Solana’s value to soar to $520 by the end of 2025. VanEck Predicts $520 By End Of 2025 For Solana VanEck’s thesis centers on Solana’s share within the smart contract platform (SCP) market, as well as the historical correlation between crypto market capitalization and the growth in the US. M2 money supply. According to the firm: “Our Solana Price Target by the End of 2025 is $520. We value Solana (SOL) based on its projected year-end market share within the smart contract platform (SCP) market. Our SCP market cap forecast is derived from US M2 money supply growth, given its strong historical correlation with crypto market capitalization.” Related Reading: Solana Could Target $220 If It Holds Current Levels – Analyst Expects Short-Term Bullish Momentum VanEck’s analysis forecasts that M2—the measure of the US money supply that accounts for cash, checking deposits, and easily convertible near money—will reach $22.3 trillion by late 2025. This figure assumes a maintained annualized growth rate of 3.2% from its last trough in October 2023. Citing regression analysis, VanEck estimates: “We project M2 to reach $22.3T by the end of 2025, maintaining its 3.2% annualized growth rate since its last trough in October 2023. Using regression analysis, we estimate total SCP market capitalization will grow 43% to $1.1T by year-end 2025 (vs. $770B today), surpassing its 2021 peak of $989B.” The firm notes a “strong correlation between M2 and SCP market cap” with a 12-month moving average R² of 0.36 and a t-statistic of 5.7 (p < 0.0001). Currently, Solana holds about 15% of the SCP market cap. However, VanEck expects that proportion to rise significantly by 2025: “Currently, Solana holds 15% of SCP market cap, but we forecast its share to rise to 22% by EOY 2025. This projection is supported by Solana’s developer dominance, increasing market share in DEX volumes, revenues, and active users.” Related Reading: Solana Metrics Surge: Total App Revenue Climbs To $840M In Record-Breaking Quarter By coupling this anticipated market share increase with an autoregressive (AR) forecast model, VanEck believes Solana’s market cap will climb to approximately $250 billion, which would yield a per-token price of $520, based on an estimated float of around 486 million tokens. Short-Term SOL Price Analysis For the moment, however, Solana continues its corrective phase, with the price trading at $189 as of press time. The 4-hour chart for SOL/USDT exhibits a well-defined descending channel, characterized by a series of lower highs and lower lows. SOL’s price action has been confined within a descending channel since January 18, marked by two parallel trendlines that highlight sustained selling pressure. The lower boundary of the channel, currently near $175, acts as immediate support, while the upper boundary near $215 serves as resistance. Notably, SOL is currently positioned just below the midline of the descending channel. If it fails to break above this level in the near term, a move toward the channel’s lower boundary appears likely. Moreover, SOL continues to struggle in reclaiming key Fibonacci retracement levels, with the 0.236 retracement ($203.40) serving as the first major resistance. At press time, SOL traded at $190. Featured image from Shutterstock, chart from TradingView.com
Solana (SOL) has been holding steady above a crucial demand level near $210, a key area that could ignite a massive bull run. After reaching an all-time high (ATH) on November 22, Solana has experienced a 23% retracement, testing investor confidence. However, analysts remain optimistic, with many expecting a significant upward move in the coming weeks. Related Reading: Ethereum Forming A Symmetrical Pattern – Key Resistance At $4,100 Renowned analyst Jelle recently shared a technical analysis highlighting Solana’s strong potential. According to Jelle, the monthly chart for SOL is primed for an “absolute monster run,” indicating that the current consolidation phase may be laying the groundwork for a powerful breakout. This view aligns with the broader sentiment that Solana’s resilience above $210 could act as a springboard for the next phase of its rally. As one of the leading altcoins in the crypto market, Solana has attracted attention for its robust performance and potential to lead the next leg of the bull market. With the price now consolidating after a sharp pullback, all eyes are on SOL’s ability to maintain its critical support and reclaim momentum. Whether Solana can deliver on its bullish promise will be a key focus for traders and investors alike in the coming weeks. Solana Holds Key Demand Solana is currently trading above a critical level for this cycle—the $210 mark. This price point, which previously acted as a significant resistance, has now flipped into a vital support level, setting the stage for Solana’s next potential rally. The importance of this level cannot be overstated, as it represents a key area where buyers are stepping in to defend SOL’s bullish momentum. Renowned analyst Jelle recently shared a compelling technical analysis on X, emphasizing Solana’s strong outlook. According to Jelle, Solana’s monthly chart is primed for what he described as an “absolute monster run.” His analysis highlights how SOL’s price is now testing its 2021 all-time high (ATH) as support, a critical juncture that could determine its trajectory in the weeks to come. Jelle’s simple yet powerful chart indicates that if Solana manages to push decisively above the $210 level, it will confirm the strength of this support and potentially trigger a massive bull run. This rally could result in impressive gains for SOL, positioning it as a standout performer in the crypto market. Related Reading: Bitcoin Breaks ATH Pushing Back Into Price Discovery – BTC To $130K? For now, all eyes are on Solana’s ability to sustain its momentum and break higher. As it consolidates above this essential level, traders and investors are closely monitoring its next moves, anticipating the possibility of a historic price surge. Price Action Suggests A Big Move Soon Solana is trading at $221, maintaining its strength above the critical $210 support level. This resilience has bolstered confidence among investors, as SOL’s price action aligns bullishly across all time frames. Solana is gearing up for a major rally, but it must first overcome the $245 resistance level to confirm the uptrend. Market dynamics indicate that SOL is in a prime position for upward momentum. Unlike other assets that may show signs of hesitation or potential consolidation, Solana exhibits a well-defined price structure that strongly favors a breakout. The lack of bearish signals further solidifies this outlook, as there is little indication of an imminent correction or prolonged sideways trading. Related Reading: ONDO Exchange Inflows Grow – Volatility Ahead? If SOL successfully breaches the $245 resistance with strength, it could trigger a wave of buying pressure, propelling the price to new heights. This setup has many traders eyeing the next potential levels for Solana, with the broader market sentiment favoring continued gains. Featured image from Dall-E, chart from TradingView
As the broader crypto market rebounds following Donald Trump’s election on 5 November, Solana (SOL), currently the sixth largest token by market capitalization, has resumed its bullish trajectory, recently reclaiming the $230 price level. On Wednesday, the Solana price surged nearly 7%, reaching $232 after a two-week correction period that followed its current all-time high achievement of $263 on November 23. Could The Solana Price Soar To $4,000? The recent price action suggests that Solana may be on track to not only retest its previous peak but potentially exceed it significantly. Crypto analyst Ali Martinez highlighted a bullish “cup and handle” pattern forming on Solana’s one-month chart, indicating the potential for a remarkable uptrend. Martinez forecasts that if this pattern plays out, Solana could see gains exceeding 1,650%, resulting in a new record price of $4,000 per token. Related Reading: XRP Price Defies Bearish Crypto Trend, Rallies 6%: Key Drivers Revealed However, perspectives among analysts vary regarding the future trajectory of Solana. While some, like Cryptorangutan, emphasize the current momentum indicators and established buying pressure, predicting a surge toward the $300 mark, others urge caution. Analyst MoreCryptoonl on the other hand, points out a completed pullback structure, indicating a clear five-wave move downward. This analysis suggests that while the recovery rally is underway, it remains uncertain whether it will develop into a bullish pattern or an ABC corrective structure. Total Value Locked Hits $9.198 Billion Despite the mixed technical signals, key financial metrics paint a largely positive picture for Solana. According to CoinMarketCap, the market capitalization stands at approximately $112.73 billion, positioning Solana as the sixth-largest cryptocurrency. Additionally, its Total Value Locked (TVL) has reached $9.198 billion, reflecting continued interest in its decentralized finance (DeFi) ecosystem. However, decentralized exchange (DEX) volumes have fallen by 25% to $28 billion, indicating some volatility in trading activity. The narrative surrounding Solana has been further fueled by recent developments in the market. Grayscale’s filing for a spot Solana ETF in the US has generated buzz, as the cryptocurrency community anticipates the potential for increased institutional investment. Additionally, the project Jupiter has revised its $1.6 billion airdrop after a failed vote, while the platform Pump.fun reported record revenue of $93 million for November, despite experiencing a 66% weekly drop. Related Reading: Bitcoin CME Chart Shows Striking Similarities To 2023, Here’s What Happened Last Time In the DeFi landscape, Solana has slipped to third place as Tron’s TVL surged 78% to $13 billion, yet it maintains a strong lead with 5.56 million active addresses. However, the recent decline in DEX revenue and volume, particularly with Raydium experiencing an 8.22% drop, indicates a need for stability in trading activities within the ecosystem. Featured image from DALL-E, chart from TradingView.com