Recently, Solana’s rise in on-chain activity indicates a robust underlying demand for SOL tokens. Solana SOL price is down to $127 and seems ready to undergo a bullish upswing in the ongoing crypto market boom spearheaded by Bitcoin BTC markers down $61,897, argues independent market analyst Hansolar.
Prediction: SOL Price Might Reach $600
The main aspect of Hansolar’s optimistic comparison for Solana is its potential to emulate Ether’s (ETH) price trends during the preceding crypto market bull runs. For example, in the 2020-2021 bullish cycle, ETH’s price soared from approximately $85 to as much as $4,935, trailing Bitcoin’s upward trend.
Bang on the nail🎯 https://t.co/tsV3los0u7 pic.twitter.com/QrAghF4fKb
— hansolar (@hansolar21) March 1, 2024
Interestingly, ETH’s upward trend surged by roughly 1,400% after Bitcoin established a new record high above $20,000, as depicted in the three-day chart below.
This fractal could replicate in 2024 as Bitcoin embarks on an extended bull run above its November 2021 record high of $69,000. Nevertheless, as Hansolar contends, Bitcoin refreshing its all-time high could equally benefit Solana this time.
“Previously, ETH took off when BTC actually broke out into ATHs. It’s then when retail buys into SOL as the high beta catch up play,” he expressed, adding:
“Currently SOL is at around 50% from ATHs similarly to how ETH was around the 50% mark as BTC was nearing ATHs in the previous cycle.”
That said, Bitcoin’s ascent toward $150,000, a valuation forecasted by Fundstrat’s Head of Research Tom Lee on ETF approval prospects, could position Solana with a $600 long-term upside target. That is nearly 450% above the current SOL price.
Solana Fundamentals
Fundamentally, Solana has performed well in terms of network adoption recently, with the total-value-locked (TVL) across its ecosystem at 20.51 million SOL, its highest level since January 2023. Theoretically, as more assets are locked into DeFi platforms, the circulating supply of these tokens may decrease, leading to a potential increase in demand relative to supply. This scarcity effect can contribute to the price appreciation of the locked tokens.
Solana’s ascending TVL appears synchronized with its sustained quarter-over-quarter (QoQ) growth monitored by the data resource platform Messari.
Notably, the network’s average daily fee payers during Q4/2023 surged 103%. In the same period, its average daily DEX (Decentralized Exchange) volume rose by 961%, with a 359% increase in average daily NFT (non fungible token) volume.
In Q1/2024, the airdrop of Jupiter DEX’s native token, JUP, also spurred on-chain activity atop the Solana blockchain. Additionally, its NFT volumes peaked near $5 billion, underscoring a strong underlying demand for SOL tokens.
Solana Price Prediction
In the short term, Solana eyes $200 as its primary upside target due to the formation of a bullish continuation pattern on its daily chart. Termed bull pennant, the pattern develops when the price consolidates inside a symmetrical triangle structure after a robust move upward. Meanwhile, it resolves after the price breaks above the upper trendline and rises by as much as the height of the previous uptrend. As of Feb. 28, SOL’s price was testing the pennant’s upper trendline for a potential breakout.
If that occurs, the price could ascend toward $200 during March, up approximately 75% from the current price levels. On the other hand, a breakdown below the pennant’s lower trendline risks nullifying the bullish setup altogether. Should it transpire, SOL’s price can drop by as much as the previous upside move, i.e., toward $60.75, down roughly 45% from current price levels.
