- The rise of Solana to $190 appears more realistic than reaching $300-1000, due to competition with Ethereum’s L2 and the risk of diminishing hype around meme coins.
- The Firedancer update could set a new standard for blockchain scalability.
Expert forecasts for Solana’s price range from $300 to $1000, yet on-chain data suggests a more realistic scenario of returning to the July highs of $190+. This is reported by Cointelegraph.
Trader and technical analyst Kaleo noted the similarity of the current SOL price pattern to ETH before its 245% rise to its ATH in 2021, suggesting a rise to $1000 by 2025.
The current $SOL chart looks incredibly similar to what $ETH did in late 2020 prior to sending to new ATHs.
If Solana manages similar growth from the previous ATH that ETH did last cycle during this bull market, $1K SOL is a reasonable target. pic.twitter.com/JYqaLtomUs
— K A L E O (@CryptoKaleo) August 12, 2024
The publication doubts this target can be reached, as the cryptocurrency’s market cap would need to reach $500 billion, placing it alongside 18 public companies.
Journalists recalled that Ethereum maintained this level during the bull run for only 40 days.
They consider a rise to $300 (+104% from the current level) to be a more reliable forecast.
As drivers, the publication highlighted:
- applications for launching a Solana ETF;
- displacing BNB from the second position in terms of TVL in the DeFi sector, competing with Ethereum in the context of DEX.
Growth Limitations
Journalists described SOL as overvalued compared to Ethereum’s L2 tokens.
The combined FDV of Optimism (OP), Arbitrum (ARB), Polygon (MATIC), Mantle (MNT), StarkNet (STRK), ZKsync (ZK), Immutable X (IMX), and others is $31 billion, more than 60% lower than Solana’s $85 billion, with approximately equal numbers of active addresses over seven days.
They also noted that users have sent stablecoins equivalent to $9.69 billion to Ethereum’s L2, more than the total in Solana and BNB Chain combined.
? Layer 2s have more Stablecoins than SOL and BSC combined!
+150% more than Solana
+94% more than Binance Smart Chain
Using @DefiLlama data for BSC/SOLMore food for thought – Next post ? pic.twitter.com/cAjQRzQgQv
— growthepie.xyz ?? (@growthepie_eth) August 13, 2024
Journalists noted that reliance on SOL due to meme coins and airdrops could prove unstable in the long term.
They expressed confidence in the asset’s price reaching $190 due to community interest in projects like Helium, Jupiter, and PayPal USD. However, they deemed a return to this level unlikely in the near term due to competition with Ethereum’s L2.
Impact of Meme Coins
The Block also highlighted the hype around meme coins on Solana, calling it a “double-edged sword.”
In July, the network reached 54.33 million active addresses, showing a 151% increase since the beginning of the year. The number of non-voting transactions also hit a new ATH, totaling 1.3 billion.
“The quality of activity matters as much as the quantity. Do these new addresses represent long-term users or short-term speculators chasing the next meme?” — commented the publication.
According to journalists, a genuine assessment of the ecosystem’s state requires considering factors such as developer activity, the use of dapps beyond trading, and the sustainability of audience engagement.
They noted the upcoming Firedancer update, which could enhance transaction processing capabilities and overall network resilience.
The update is expected to enable the processing of millions of TPS, further strengthening Solana’s position as a high-performance blockchain. By maintaining low fees, developers could set a new standard for scalability, The Block emphasized.
In April, the Solana team updated the software as part of measures to combat blockchain congestion, which led to transaction delays.
In August, developers, validators, and client teams addressed a critical network vulnerability through a coordinated update.