One of the world’s top-performing blockchains
Solana is recognized as one of the fastest-performing blockchains globally, designed to maintain low transaction costs for applications that serve billions of users. The typical transaction fee hovers around $0.00025, and Solana’s official site claims it can process 50,000 transactions per second. Solana’s unique “Proof of History” (PoH) consensus mechanism enables it to manage increasing transaction volumes efficiently without sacrificing performance.
Similar to Ethereum, Solana supports smart contracts, allowing developers to build decentralized applications (DApps) and execute custom programmable logic on the blockchain. Solana’s ecosystem has expanded with a variety of applications, including decentralized exchanges, stablecoins, and NFT platforms.
SOL serves as the utility token on the Solana network, used for staking, covering transaction fees, governance decisions, and incentivizing validators for network upkeep. The token had a notable bull run earlier this year, with its price more than doubling from around $78 in January 2024 to a high of $209 on March 07.
However, investor sentiment in the broader cryptocurrency market has soured following Bitcoin’s dip below the $65,000 level, affecting many assets across the crypto space. According to analysts, these movements are largely attributed to macroeconomic factors.
VanEck’s filing for the first Solana ETF
Over the past week, Solana has outperformed its competitors, rising by 9% while Bitcoin and Ethereum both saw declines of over 4% and 2%, respectively. Analysts David Duong and David Han from Coinbase commented:
“This performance has been driven by a series of internal factors within the Solana ecosystem, including significant technological updates and the filing of the first Solana ETF by VanEck in the U.S. Regardless of its outcome, the ETF filing is a promising development.”
The good news is that many crypto analysts predict a win for crypto-friendly Donald Trump in the U.S. presidential race, which could speed up the approval process for the Solana ETF. This has brought Solana back into the spotlight, with data from on-chain analytics firm Santiment showing a significant rise in SOL’s social volume following the recent crypto market recovery.
Monitoring the volume
The “Social Volume” indicator tracks how much discussion an asset generates on major social media platforms. This metric measures the number of unique posts or messages that mention the cryptocurrency at least once. It’s important to note that this indicator doesn’t count just the mentions but considers the overall discussion trends across social media.
A high number of mentions doesn’t necessarily mean widespread conversation—it could be confined to niche groups. The Social Volume metric gives a better picture of overall trends by measuring the volume of posts.
Solana (SOL) technical analysis
Since June 05, 2024, Solana (SOL) has decreased from $175.62 to $122.18, and it currently sits at $140. This price drop can be linked to several factors, mainly the shift from a positive to a negative market sentiment. As long as SOL remains below the resistance level marked on the chart, the risk of further decline remains.
Key support and resistance levels for Solana (SOL)
Based on the chart from January 2024, several key support and resistance levels can guide traders in predicting price movements. Solana has weakened from its recent highs, but if the price moves above $160, the next target could be the resistance level at $180. The primary support level is $120; if the price breaks this, it would signal a “SELL” and could lead to a drop to $100. A further decline below $100, which is another key support level, could bring the price down to around $80.
What drives Solana’s price increase
Market sentiment plays a significant role in Solana’s price movements, but positive news, partnerships, and developments within the Solana ecosystem could attract more investors, pushing the price higher.
There is a possibility that the introduction of a Solana ETF could encourage more investors to buy SOL in the coming months, potentially leading to further price growth. If Bitcoin and other leading cryptocurrencies experience positive developments, Solana could easily surpass its current price levels.
What suggests a decline for Solana (SOL)
Solana (SOL) remains a volatile and risky investment, requiring caution from potential investors. The macroeconomic environment is still uncertain, with major central banks maintaining high interest rates, which could negatively impact risk-sensitive assets like cryptocurrencies.
Solana’s support level is currently at $120, and if the price falls below this point, it could signal a further decline to $100.
Insights from analysts and experts
Solana has shown strong performance recently, rising 9% in the last week, while Bitcoin and Ethereum both faced losses. This surge is partly due to the filing of the first Solana ETF by VanEck, a significant development regardless of its outcome. Analysts also believe that if crypto-friendly Donald Trump wins the U.S. presidential election, it could accelerate the approval of the Solana ETF.
Furthermore, Santiment’s “Social Volume Indicator” has seen a noticeable rise, showing a surge in discussion surrounding Solana across social media platforms.
Disclaimer: Cryptocurrency is highly volatile and may not be suitable for all investors. Never invest more than you can afford to lose. This information is intended for educational purposes and should not be construed as financial or investment advice.
