Solana Reaches 14-month High: Is the Rally Finished?

2023-11-14, 11:46

TL; DR

Solana network upgrades and increased institutional investment have contributed to the current rally.

On 1 November Solana attained a 14-month high of $46.60.
The Solana price may reach $1,646.45 by 2030.

Introduction

When the Sam Bankman-Fried owned FTX crypto exchange and its sister company Alameda Research collapsed, a year ago, many people thought that the Solana crypto will experience stunted growth for a long time. This was because FTX had a large holding of SOL, Solana blockchain’s native cryptocurrency. However, within a year from the FTX implosion SOL is trending and among the top gainers for the month of October.

In this article, we discuss Solana’s recent price spike as well as its market outlook. We will also examine the reasons behind its current rally.

SOL Surges from $10 to $46 in 2023

The crypto market has been mesmerized by the Sol token’s momentum this year as it spiked by over 300%, from $10 at the beginning of the year to over $46. On 1 November, the cryptocurrency reached $46 which marked a 14-month high.

Nonetheless, Solana crypto rally did not end there as it has continued to the present moment. As of 11 November the token is trading at $56.29, after gaining by 9.6% within the last 24 hours as The Graph below shows.

Solana Price - CoinGecko

The above picture indicates a few interesting facts about the Sol token rally. The cryptocurrency has been bullish since October this year. Notably, from the beginning of November, the token’s trading volume has been generally increasing.

Arthur Hayes Purchase SOL

SOL’s current price momentum has attracted retail and institutional investors. Arthur Hayes, BitMex co-founder, is one high ranking investor who recently purchased a large quantity of Solana tokens.

He purchased Sol after its 500% rebound from its December 2022 market bottom of about $8. As such, Hayes acquired the Solana token when it was around $46. This means that SOL has gained about 10% since that time.

Reasons for Solana’s Rally

It cannot be a mere coincidence that the SOL price has been increasing since October. Certainly, there are several factors that drive its value up. Increased activity on the blockchain, Solana upgrade and institutional investment are some of the causes of SOL’s recent price surge.

Institutional Investment Fund Inflows: One of the main contributing factors to the current Solana price surge is institutional investment fund Inflows. A CoinShares report says that the network received large capital Inflows from institutional investors.

It says that more than $24 million was invested in Solana during the second week of October 2023 alone. It furthers assets that more than $100 million has been injected in SOL this year alone. Bitcoin is the other cryptocurrency that recorded high capital Inflows as well. However, ETH has net outflows within the same period.

Network Upgrading: The Solana blockchain’s recent network upgrade created confidence in the market and has contributed to its bullish momentum. On 28 September the blockchain was upgraded to version 1.16 which introduced a “gate .” The gate enables the constant upgrading of the network which enhances network stability.

The upgrade also introduced a “confidential transfers” feature which enables users to encrypt their transaction details, something that increases user-privacy. For example, a user may choose to hide his/her transaction amount.

Part of the upgrade involves improvements in RAM usage for validators. Generally, the upgrade results in better efficiency, security and user privacy. Due to this, the network has become more decentralized as more validators can join.

Increase in Network Activity: Solana has had a significant increase in its network activity. Cointelegraph quoted DappRaddar as saying that Solana had 14.51% increase since the beginning of the year. Such an increase covers the various sectors like NFT, collectibles and gaming it is involved in.

Solana Network Activity - Cointelegraph

Solana addresses that engage with the various decentralized applications (dApps) have increased during the year. In the NFT market, Solana has gained much popularity due to its scalability and cost-efficiency.
Read also: Is Solana the Eco King Returning?

Solana Rally May Halt

Despite its great recent showing the Solana future, in terms of SOL price, looks bleak. The current rally might halt at any time as we approach the end of the year. We can deduce this from the high derivative liquidations during the last week of October.

Derivatives worth more than $10 million were liquidated, the largest amount within the last 3 months. According to DefiLlama the total value locked for Solana is $538.5 million which is far lower than its 2-year-ago figure of $10 billion.

Also, some analysts anticipate that the SOL price may drop in the future when the token which FTX and Alameda hold come to the market. As of August this year, the FTX Estate held around 1.16 billion SOL tokens.

Solana Price Overview

Basically, the Solana price increased by 36.6% between 30 October and 2 November. On 6 November it failed to breach the $44.50 level and it retraced by 10%. In fact, by the end of October $44.50 was the highest price level it reached since August this year. The positive crypto news is that recently Solana breached the $50 mark and is rising towards $60.

Solana Price Prediction

With the rate at which the Solana price is increasing by December 2023 it may reach $60. CoinMarketCap anticipates that its value may range between $67.66 and $83.41, with an average of around $69.51 in 2024. In 2025 it may fluctuate between $67.18 and $147.31 in 2025.

In 2026 investors should buy SOL at a price that ranges between $147 and $148.50. By 2027 its price should have increased significantly due to greater adoption of its products. Therefore, it may range between $148 and $672.02. The next table shows the estimated Solana price for the period between 2028 and 2030.

Solana Price Prediction, 2028 to 2030 - CoinMarketCap
As you note in the table, investors may purchase Solana at $1,646.45 in 2030. What this means is that its value will rise gradually over the years unless there are serious inhibiting factors like regulatory constraints.

Conclusion

Solana reached a 14 month milestone when it attained a high of $46.60 on 1 November. The Recent blockchain upgrades, institutional investments and increased network activity have contributed to its on-going rally. The market expects the SOL price to reach $1,646.45 by 2030.

FAQS about Solana

How much will Solana be worth in 2025?

The price of SOL is likely to range between $300 and $500 in 2025. However, many factors like its global adoption, innovations and regulatory clarity will influence its price change over the next two years.

Why is Solana price so high?

The price of Solana is high due to large institutional investment in the token since October 2023. The other reasons for Solana’s recent rally are its blockchain upgrade and an increase in network activity.

What was Solana’s peak price?

Solana’s all time high value was $260 attained in November 2021. During that year the price of most cryptocurrencies were high because of the prevailing Bull Run.

How much will Solana be worth in 2030?

In 2030 Solana is likely to trade at around $1,646.45. However, this depends on various factors such as institutional capital Inflows and the performance of other major cryptocurrencies like Bitcoin and ETH.

Author: Mashell C., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

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