Our Solana price prediction factors in past and recent events that have impacted the cryptocurrency as well as future events that may shape Solana’s performance.
The U.S. elections in November 2024, new development tools, and Solana’s TVL are just some of the topics we discuss in the price prediction.
Solana is among the top cryptocurrencies in today’s markets. Although no CME futures exist at this time, ETF applications were filed for a spot ETF. Lets first see how Solana reacted during market crashes.
Solana and the market crash
During crypto winter, the total market capitalization of cryptocurrencies, which had reached a high of over $830 billion, dropped to less than $130 billion in a span of a few months.
The market leader, Bitcoin, which hit its all-time high of just under $20,000 in December 2017 across exchanges, dropped to around $3,200, a decrease in value of greater than 84%. Solana slid from over $200 to under $15 during crypto winter.
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FTX’s collapse contributed to SOL’s weakness towards the end of 2022. Since crypto winter and despite the chain suffering from congestion, Solana recovered.
Why did Solana crash in August 2024?
The August 2024 crash, now referred to as the “Share Market Chaos,” – is a rather simplistic term given the catastrophic consequences of press time.
The odds of the US entering a recession have increased following soft US economic figures.
J.P. Morgan raised the odds of a recession in the United States by the end of the year to 35% from 25%. The fear of a US session recession sent the financial markets, including cryptocurrencies, lower.
The market turmoil that followed was nothing short of dramatic. The S&P 500 saw its largest decline since November 2022. Japan’s Nikkei 225 had one of its worst days ever, falling over 12% in a single trading session — its largest one-day fall since 1987.
The market will focus on the Fed’s monetary policy in September and US jobs data. When there is blood in the crypto streets, is it really the time to buy? Let’s explore Solana’s TVL first.
Solana TVL and active addresses
Assessing Solana’s Total Value Locked (TVL) is essential for assessing investors’ confidence in the chain.
According to DefiLlama, total value locked (TVL) in native protocols and applications has surged to approximately $3.8 billion at press time, representing a staggering 1150% increase from the mere $304 million held at the same point in 2023.
(Solana) TVL compared to 24-hr volume | source
Additionally, the Solana network has seen a remarkable increase in active addresses, climbing from just 215,000 in the previous year to over 2 million today and over 40m (average) daily user transactions.
These developments can be attributed to several key factors:
- Enhanced transaction efficiency: Solana’s unique architecture, which enables high-speed parallel processing of multiple transactions, has driven a significant increase in TVL.
This rapid transaction capability has spawned a new wave of applications that rely on low-cost, frequent interactions. Consequently, the platform has witnessed a surge in user adoption, particularly when it comes to trading meme coins.
- Growing ecosystem and capital inflow: There are a few factors contributing to this. The first is the amount of capital that has flowed into the Solana ecosystem.
A big part of this growth has come from the increase in stablecoin usage. Traditional assets such as cash and Treasury bonds are getting tokenized into stablecoins on Solana for both peer-to-peer and business-to-business transactions.
Stablecoin supply increased 71% from $1.9 billion to $3.2 billion since the start of 2024, with PayPal’s launch of PYUSD on Solana further fueling this growth.
- Increased network activity: Surging network activity alongside rising fees and weekly active addresses suggest the higher prominence Solana has gained.
Solana has recorded an all-time high of weekly active addresses, breaching 10 million in July. Fee generation has also seen a significant surge, where 132 days of fees above $1 million have been accounted for in the last five months.
In aggregate, these are all a reflection of a maturing Solana ecosystem and its ability to solve technical challenges and outages that plagued its ecosystem in earlier days.
It is worth noting that SOL-based meme coins posted the strongest gains in H1 2024, signaling the chain’s resilience, although tokens on other chains also receive high interest.
However, major events are due in 2024 that could have a significant impact on the chain.
Key events for Solana in 2024
There are 3 major events that could affect Solana in a bullish or bearish manner in our SOL price prediction.
The Fed’s monetary policy
A rate cut is currently priced in for September. The accompanying statement will dictate the tone of the markets, including cryptos.
Will the Fed signal aggressive rate cuts are due, or will a wait-and-see approach be chosen instead?
While the Fed’s monetary policies affect multiple markets, it is essential to monitor the US central bank’s stance throughout 2024.
The U.S elections
The U.S. presidential election could greatly influence Solana (SOL). A Trump presidency might speed up the launch of more crypto ETFs, including Solana’s, bypassing the usual extensive process that begins with federally regulated futures contracts—a hurdle Solana currently faces.
Trump’s campaign has made clear its pro-crypto stance, promising to stop anti-crypto regulations, supporting Bitcoin mining, and barring the Federal Reserve from developing a CBDC. If Trump follows through with these pledges, the regulatory environment for cryptos such as Solana could improve and drive up prices further.
Pro-crypto Democrats aligned with Vice President Kamala Harris are pushing for her to break away from the party’s anti-crypto segment. This change could benefit the crypto industry, irrespective of the election outcome.
2024 U.S. presidential election interactive map | source
Solana spot ETFs approval
Although the approval deadline is in 2025, news about the potential approval may surface until the end of the year. Solana ETFs could serve as a bridge between the conventional financial system and the world of cryptocurrencies.
The regulatory environment and market factors present challenges, but crypto investors’ interest in Solana suggests that Solana ETFs should eventually exist.
The main obstacles to gaining approval for Solana ETFs are the stiff regulatory environment laid down by the SEC and the lack of future contracts. Donald Trump has stated that if he wins the elections. Gensler (the SEC chair) will be fired.
Solana roadmap for 2024 – 2025
While everything critical will be presented at Solana’s Breakpoint 2024 event, Solana’s roadmap gives us a glimpse into upcoming announcements stakeholders can expect from the ecosystem for the remainder of the year.
As you’d expect, the project focuses on enhancing scalability, developer experience, and institutional adoption.
Token extensions are set to revolutionize token creation with features like confidential transfers, transfer hooks, and metadata pointers, boosting flexibility and customization.
Firedancer, a completely overhauled validator client, promises to dramatically improve network performance by processing over 1 million TPS per core. This is part of a broader push for validator client diversity, including Jito-Solana, Sig, and TinyDancer.
To facilitate broader adoption, AWS now offers Solana blockchain node development blueprints, while Google Cloud provides access to Solana data on BigQuery.
Beyond these foundational improvements, Solana is also introducing Gameshift for easier game development, Armada Market’s toolkit for enhanced token launches, Solana Permissioned Environments (SPEs) for enterprise use cases, and a new web3.js library for optimized dApp bundling.
The upcoming Runtime v2 aims to significantly enhance performance, developer experience, and interoperability through features like generic interfaces and a unified VM.
Solana developer tools to accelerate the adoption rate
Orchestrated growth in Solana is based on the fact that it has a strong set of developer tools. The tools are efficient and scalable helping developers to build innovation natively or integral collaborations.
This ecosystem boasts a thriving community of over 2,500 developers, with a significant portion (52.5%) possessing more than three years of experience. This wealth of talent accelerates development and solidifies Solana’s position as a leading blockchain platform.
Solana price prediction: technical outlook
Given Solana’s technological superiority, robust ecosystem, and growing adoption, a price target of $250 appeals conservative.
source: tradingview
The network’s performance (evidenced by the explosive growth of its DeFi ecosystem and the emergence of applications such as SolChat and even a Solana Mobile) is, in fact, mind-blowing.
The kind of innovation happening on Solana would inevitably attract a lot of developer interest, which is one of the key drivers for the price to keep going up in the long term.
FAQs
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References
- Cboe files for SEC approval to list Solana ETFs, start clock for required decision | Reuters | 2024 |
- Recession fears, trader repositioning spark markets sell off | NBC News | 2024 |
- Cryptos See Over $1B in Liquidations as Bitcoin; Ether Lose Major Support Levels | Yahoo! UK | 2024 |
- Kamala Harris open to shifting pro-crypto in break with Biden, says Rep. Nickel | The Street | 2024
- What Solana Devs Can Look Forward to in 2024 | Solana |2024 |
- How the Crypto World Learned to Love Donald Trump, J.D. Vance, and Project 2025 |Time Magazine | 2024 |
