Solana and top cryptocurrencies like Ethereum and Bitcoin are struggling at spot rates. Following the plunge on June 6, prices are under pressure, cementing the position of sellers who have been dominant since late May 2024.
Will The Solana Uptrend Remain?
Even so, some analysts are upbeat, expecting not only altcoins to recover in the sessions ahead but specifically for Solana, a top-5 coin, to emerge as a leader in the next cycle.
In a post of X, one analyst noted that provided bulls maintain the current uptrend, rejecting any attempt for lower lows, SOL will continue to float higher.
Of note, this will continue the trend seen from the better part of H2 2023, when the coin rose from obscurity to become one of the top performers, even outdoing Bitcoin. Looking at the daily chart, SOL is up 100% from January 2023 lows and roughly 8X from the pits of September 2023.
Even though there has been a cool-off after the rally to as high as $210 in March 2024, the uptrend remains. So far, SOL is down 25% from March peaks, with prices retesting a key support trend line. As bulls soak in selling pressure, attempting to reject bears of June 6, keeping prices above $160 will be crucial.
Though technical candlestick formations support this bullish outlook, there are favorable developments from the fundamental side of the equation.
Solana Finds Adoption But Will Regulators Crack The Whip?
Increasingly, more financial institutions are integrating Solana to future-proof their offerings. So far, PayPal, Visa, and Stripe support Solana.
Most importantly, as they integrate Solana, they recognize the need to adapt to rapidly changing user preferences, most of which are looking for cheaper and faster transactions. Solana boasts a theoretical throughput of up to 65,000 transactions per second (TPS).
Meanwhile, though Ethereum has the largest network, it can only process 15 transactions every second, negatively impacting transaction fees. Depending on network demand, transferring tokens or executing smart contracts on Ethereum can be expensive. Fees fluctuate and, at one point, rose to over $50, according to YCharts data.
Though Solana is fast becoming a choice for institutions and meme coin deployers, there are ongoing challenges. In lawsuits filed by the United States Securities and Exchange Commission (SEC) against Binance and Coinbase, the regulator alleges that Solana is an unregistered security.
At the same time, unlike BTC and ETH, SOL, listed on the CME market, lacks a developed futures market. This absence, considered when the United States SEC wants to approve an exchange-traded fund (ETF), may take years before the product goes live.
Feature image from Canva, chart from TradingView
