The recent price increase Solana is experiencing is putting many traders and investors on edge as many are very cautious about buying the top of the bullish trend. The traction and publicity of the coin seem to be decreasing but the previous performance means that most investors still have their eye on it and are literally buying any dip in price.
Many holders are already in serious profit after SOL became a three-digit asset ($100+) and buy into Solana price predictions of around $1000 in a few years. For those who missed the boat, a common question is, will Solana dip?
This article provides a comprehensive insight into SOL and possible events that could take place in the coming days. In this article, we will consider the following:
- Analysis of Solana Price Action in 2021
- Will Solana Dip Again?
- How Low Can Solana Go?
- How High Can Solana Go?
Analysis of Solana Price Action in 2021
As of the time of writing, Solana is trading at $212 per unit. The coin rose to an all-time high of $214 in the last 48 hours. Since the kickoff of a bullish run for the SOL/USD pair, the pair have managed to stay off bearish sentiment as breaking ATH is more of a weekly tradition. The coin is in a league of its own.
The coin continues to soar in every timeframe as it continues its bullish run. On the monthly chart, the now seventh coin by market cap is currently in the fourth consecutive month of the price increase. The start of the green months started with the SOL gaining 8.36% in June. The next month recorded a little compared to the previous as it an increase of 3.4%.
Of all the months, August is the most bullish. Solana gained a whopping 194.4% during this month. September is looking promising as the coin has gained 60% just seven days into the month. The is looking more promising on the weekly chart.
Solana has recorded gains for seven consecutive weeks and looks on track for its eighth. The gains started with a 5% increase in the first week of the price increase. The next week was bigger as the coin increased by 20%. After a 10% gain in the third week, the coin enjoyed an average of 30% increase throughout the next three weeks. The trend ended with the seventh week gaining more than 50%.
Indicators like the Moving Average Convergence Divergence (MACD) have long given off bullish signals after both lines converged and diverged with no further signs of convergence in the coming weeks. On Balance Volume (OBV) is giving off no signals as of the time of writing as it is only displaying the continuous increase in trading of the coin.
The Relative Strength Index (RSI) is no different from the other indicators as Solana enters the overbought region in the early parts of August following the increase in traders’ activities. Looking closely at the RSI chart, it is almost impossible not to notice the slight change in trajectory following the mayhem that took place in the market today.
The basic law of RSI may be catching up with Solana with the slight change in the Relative Strength Index chart momentum. The bears will finally catch up if the uptrend does not continue. The recent price increase has left SOL with a market cap of over $61.8 billion.
Many still argue about whether Solana may exceed $999 but not anytime soon. To get this into perspective, the global cryptocurrency market cap is estimated at $2.35 trillion at the time of writing. Bitcoin is still the largest coin with a market cap of $890 billion at this time. Ethereum follows behind with its total worth estimated at $407 billion.
The total supply of Solana is 488,630,611 which when multiplied by $999 means a $488 billion market cap if all tokens enter circulation.
However, only a limited number of coins are currently in circulation (292,839,984) with a majority expected to go into circulation in the coming years via inflationary staking rewards. Assuming the circulating supply reaches 330,000,000 within the next five years, then SOL at $999 will be estimated at a $329.7 billion market cap, and still less than Ethereum’s current market value.
Will Solana Dip Again?
The law of gravity states that what goes up must come down. This law applies to a whole lot of things to an extent including the crypto market. Any coin that enjoys price surges at some point will also face retracement. Solana is not exempt from this rule and will dip.
The interesting thing about the dip most coins experience is that they may not retrace as low as they started the uptrend. This will also most likely apply to SOL because of the growing community around the project.
How Low Can Solana Go?
To get a glimpse of how low SOL may dip, we will be comparing it to another with a similar condition as the one is experiencing now. Dogecoin made waves earlier this year with its exceptional pumps. The coin rose as high as $0.73 to record a new all-time during this time with many traders in a state of FOMO.
Solana appears to be seeing the same condition. Although there are differences in what is responsible for the pumps, SOL is rising fast as did DOGE. After the bullish run, Dogecoin was plagued by a series of price retracements that left the coin at 65% below its ATH. Solana may not dip as low as 60% from its current all-time but it still runs a risk of dipping below $150.
How High Can Solana G0?
Future conditions will determine the extent to which the coin goes. These conditions span from general market sentiments to events that will directly affect the coin. As of now, the seventh coin-by-market cap is still riding on the news of the launch of Degenerate Ape Academy, a non-fungible token ( project built on the Solana blockchain on August 15. )
Following this news, the last seven days have seen more firms integrate the NFT market into their list of services. Blockchain-based music streaming platform Audius announced on September 2 that it had launched a full Solana NFT integration, allowing its more than six million users to begin featuring digital collectibles from the Solana library.
September 6 saw FTX join the NFT train as it announced that the platform will enable users to mint, buy and sell NFTs. As per the announcement, they will all be traded cross-chain across the Ethereum and Solana blockchains. More integrations and collaborations with other projects are sure to take place in the days ahead. These circumstances will spearhead more price hikes. In the short term, SOL could spike as high as $250 before the end of 2021. The coin may also get as high as $1000 within the next five years.
Given that Solana, like most crypto projects, is fairly new, it is almost impossible to accurately predict or forecast the price. However, in this article, we drew insights from the project’s outlook and technical charts to make predictions of likely scenarios. Using these tools we were able to answer ensuing questions like, can the SOL/USD pair hit four figures this year, how low the coin could go and how high.
The predictions are based on current market conditions. It is also important to note that Solana, like most new coins undergoing development, information from this article should not be construed as investment advice but only used for informational purposes.
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