Solana price prediction: calm before the storm?

By October 8, 2021DeFi
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Solana SOL token symbol in digital circle with cryptocurrency theme on blue background. Cryptocurrency coin icon. Vector illustration.

The Solana price has stagnated in the past few weeks. After recording an impressive growth between August and September, the SOL price has gone nowhere recently. It is trading at $160, where it has been in the past few days. This price action brings its total market capitalization to more than $46 billion, making it the 7th biggest coin in the world.

SOL fundamental analysis

Solana is a leading blockchain project that enables developers to build scalable decentralized projects. The network has several advantages over Ethereum, the current market leader in the industry.

First, Solana was built from scratch using the proof-of-stake (PoS) technology while Ethereum was designed using a proof-of-work (PoW) technology. A PoS technology uses validators to verify transactions while a proof-of-work uses miners. Ethereum is expected to transition to a PoS technology in the first quarter of 2022.

Second, Solana is known for its speed in verifying and completing transactions. The platform can process more than 2,200 transactions per second. In contrast, Ethereum handles less than 20 transactions per second.

Third, Solana’s transactions are relatively faster than those of Ethereum. According to its website, the average cost of a transaction is $0.00025, which is substantially lower than that of Ethereum.

Therefore, the number of platforms built using Solana has been increasing. For example, a quick look at the Decentralized Finance (DeFi) industry shows that the number of transactions is rising. About 23 platforms are built on Solana with their total value locked (TVL) being at more than $10 billion. Some of these platforms are Saber, Sunny, Raydium, and Orca, among others.

In contrast, Ethereum has a bigger market share in the industry. It has more than 252 DeFi platforms and a total value locked of more than $143 billion.

Solana price forecast

The daily chart shows that the Solana price has been in a narrow range in the past few days. The coin is trading at $160, which is between the important support and resistance levels at $115 and $215. The price is also along the 25-day and 50-day moving averages while the Average True Range (ATR) has declined to 6.2.

Therefore, the outlook of the SOL price at this stage is neutral, meaning that its price can break out in either direction. A bullish breakout will see it retest its all-time high of $215, which is about 37% above the current level.

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