Originally published on: December 11, 2024
Solana’s native token, SOL, has seen a remarkable 13% spike from its recent low of $203.30 on Dec. 10, crossing the $230 mark. This impressive price action has sparked optimism for further gains, backed by derivatives and onchain metrics. Traders are now speculating on whether the correction has concluded and what potential catalysts could propel the price to surpass $260 and reach new all-time highs.
In 2024, SOL made headlines by hitting a new all-time high of $264.50 on Nov. 22. Although the momentum couldn’t be sustained, with SOL failing to keep pace with the broader altcoin market, which surged by 18% since Nov. 22 while SOL dipped by 12%.
A major contributing factor to SOL’s recent success has been Solana’s SPL tokens, including popular memecoins. However, this sector has seen a notable slowdown in both volume and price recently. Memecoins like Dogwifhat (WIF), BONK, Jupiter (JUP), POPCAT, and Wormhole (W) have all experienced significant declines in the past week.
An alarming 63% drop in onchain volumes on the Solana network in the week ending Dec. 9 has raised concerns about the sustainability of the price surge. Nevertheless, similar declines have been observed on other networks like Ethereum, BNB Chain, and Avalanche.
Some traders attribute SOL’s underperformance to ‘maximal extractable value’ (MEV), with a focus on the strategy of ‘sandwiching’ to capitalize on price fluctuations. Clearing excessive leverage through the cryptocurrency market crash on Dec. 9 benefited SOL, leading to a drop in futures open interest and bullish leverage costs.
Bolstering investor sentiment in SOL is a target price of $750 set by Bitwise, in anticipation of growing institutional investment, a favorable regulatory environment, and the emergence of significant projects on the network. With the expectation of a potential Solana ETF approval in the US and positive market conditions, SOL investors are looking forward to a promising start to 2025.
As the landscape for cryptocurrencies continues to evolve, it’s essential to stay informed and adapt your trading strategies. Subscribe to the Markets Outlook newsletter for critical insights on investment opportunities, risk mitigation, and market trends.