Solana sees a $600 target for the upcoming crypto surge.
Solana (SOL) looks set to receive a bull run in the current crypto market boom led by Bitcoin (BTC), argues independent market analyst Hansolar.
The cost of SOL can be as high as $600.
The main point of Solana's Hansolar bullish analogy is its ability to replicate Ether (ETH) price trends during previous crypto market bull runs. For example, during the bullish cycle of 2020-2021, the price of ETH increased from around $85 to $4,935, which led to the rise of Bitcoin.
Interestingly, ETH's growth increased by approximately 1,400% after Bitcoin set a new record high above $20,000, as shown in the three-day chart below.
This fractal could be repeated in 2024 as Bitcoin traces an extended bull run above the November 2021 record high of $69,000. However, Hansolar argues, Solana can equally benefit at this time when Bitcoin renews its all-time high.
“In the past, ETH was raised when BTC moved into ATHS. That's when retail bought into SOL and had high beta,” he said.
“Currently SOL is around 50% of ATAs, in the same way that ETH was at the 50% mark and BTC was approaching ATHs in the previous cycle.”
That said, Bitcoin's run to $150,000, the price predicted by Fundstrat's head of research Tom Lee on ETF approval prospects, could be a long-term reversal target for Solana's target of $600. This is 450% higher than the current SOL rate.
Do Solana Fundamentals Support SOL Predictions?
Basically, Solana has done well in terms of network adoption.
In theory, as more assets are locked up on DeFi platforms, the circulating supply of these tokens could decrease, leading to an increase in demand relative to supply. This scarcity effect contributes to the price appreciation of locked tokens.
Read more: Why Solana Wins Despite Ethereum ETFs
Solana's rising TVL appears to be tracked by data utility platform Messari, along with sustained quarter-on-quarter (QoQ) growth.
Specifically, in Q4/2023, the network's average daily rate of payers rose 103 percent. At the same time, the average daily DEX (Decentralized Exchange) volume increased by 961%, while the average daily NFT (Non-Vendor Token) volume increased by 359%.
In Q1/2024, an airdrop of the Jupiter DEX native token JUP triggered chain activity on the Solana blockchain. Also, NFT volumes have risen to around $5 billion, which has shown strong demand for SOL tokens.
Solana technical analysis
In the near term, Solana holds $200 as the main upside target due to the formation of a bullish continuation pattern on the daily chart.
Dubbed a bull pennant, the pattern is formed when prices consolidate in a congruent triangle structure after a strong uptrend. Meanwhile, after the price breaks above the upper trend line, it resolves and rises as high as the previous high.
In the year As of February 28, SOL price was testing the pennant's upper trend line for a potential breakout. If that happens, prices could rise to $200 in March, an increase of roughly 75 percent from current price levels.
Conversely, a break below the pennant's lower trend line can completely invalidate a bullish setup. If this happens, SOL's price could retrace its previous upward move to $60.75, about 45% from its current price level.
