A few days ago (August 7), we published an article through the backup account of Hualihuawai DAO, making a simple guess from the perspective of market value, and believed that the highest price of SOL in this bull market may reach 394-506 US dollars.
Then, some friends left messages expressing different opinions. Some friends thought SOL was garbage, while others thought SOL would at least rise to $1,000.
Different people will naturally have different views and opinions on any matter. Anyway, speech is relatively free and your wallet is your own. The focus is not what others say, but what you will do.
It is very difficult to make accurate predictions about prices, because the results you get from different angles and dimensions may be different. Moreover, we have always emphasized that the market is unpredictable. If you can accept the rise and fall of the market, then if you are optimistic, buy it, and if you are not optimistic, don't buy it. In fact, trading is like this. As for how much money you can make in this process, it depends on a person's luck, the strategy implemented, and personal cognition.
So far in this round of bull market, it can be said that SOL is almost the only altcoin that has maintained relative strength and continued popularity throughout the bull market cycle, and Solana's dominance in the MemeCoin field is also one of the main factors driving this trend. It is no exaggeration to say that Solana now seems to have become the largest crypto casino, MemeCoin has become a gambling game, and SOL has become a demand chip. The more people gamble, the more favorable it will be for the price of SOL.
Here we might as well continue to look at SOL from two angles:
- Return on investment
Through the return on investment this year (January to August), we can also find that SOL is even ahead of the king of altcoins, ETH. As shown in the figure below.
- Market capitalization relative valuation
If we calculate the relative valuation of the current SOL price and the market value of ETH, we can find that the relative valuation of SOL is about 4.4 times that of ETH. As shown in the figure below.
As long as there are differences in relative valuations, from a speculative perspective, SOL seems to still have a lot of room for speculation and hype.
In addition to the above data levels, we can also look at the development of SOL:
1. Expansion of Narrative
In the previous article (August 9), we also mentioned that although Solana is currently mainly hyped up by the popularity of MemeCoin, popular tracks such as AI and DePin may also (possibly) be hyped up in the future.
Through some public research data, we have actually been able to find that most of the DePIN x AI projects currently under development have also given priority to the Solana network. There are currently about 78 DePIN projects on the Solana network, which is in a leading position. As shown in the figure below.
In other words, if the narrative heat of MemeCoin decreases in the future, Solana can continue to carry out a new round of hype through popular narratives such as DePIN and AI.
2.SOL ETF
A few days ago (August 8), Brazil approved the world's first Solana-based spot ETF, which will reflect the CME CF Solana USD Reference Rate, a benchmark interest rate designed to provide a reliable value of Solana denominated in US dollars. As shown in the figure below.
At the same time, the United States has also made continuous progress in Solana ETF. For example, in June this year, investment companies VanEck and 21Shares applied to the SEC (U.S. Securities and Exchange Commission) for a spot Solana ETF. In July, CBOE (Chicago Board Options Exchange) also submitted the Solana ETF's 19b-4s form to the SEC. These signs basically indicate that, like BTC ETF and ETH ETF, the approval of the U.S. SOL ETF seems to be only a matter of time.
In short, if you are optimistic about a project, you can always find some reasons to be optimistic. If you are not optimistic about a project, you can always find some reasons to be pessimistic. Again, the results you get from different angles and dimensions may be different. The key is not what others say, but how you see it. You must have your own judgment. Other people's analysis or opinions only provide you with an open mind or methodology.
As for whether SOL will exceed $1,000 in this bull market as some people predict, I don’t know. But as we mentioned in our previous article (August 9) on the topic of ETH: Children make choices, adults only look at benefits. If you are struggling to decide whether to buy ETH or SOL, then just buy some of both.
OK, I understand the principle a little bit, but now the question is: Can I still buy SOL now?
If you have been watching from last year to now and do not have SOL yet, then I suggest you do not buy anything. Even if SOL may increase in the future, you may still lose money. If you have just entered this field and do not know much about it, then I do not recommend you to rush to make money through trading now. It may be safer to learn and observe first and then consider trading. If you must buy something, then I still only recommend buying BTC and holding it, but the money you make is yours, and if you lose money, don't blame me.
Next, we will continue to share our views on the market. As for what you should do, I will not make any specific suggestions.
History doesn't repeat itself, but sometimes it rhymes.
If anyone has experienced the last round of bull market, let's recall the situation at that time. After the outbreak of the COVID-19 pandemic, BTC continued to rise for more than 400 days, and the overall increase in altcoins was not large during this period. Then, in May 2021, BTC began to go sideways, and after testing the highs several times, it began to plummet. As shown in the figure below.
The script of this round of bull market is basically the same. Since March 2023, BTC has been in an overall upward trend until March 2024, which is nearly 400 days. Then BTC began to consolidate and began to test highs. After several failures, BTC began to plummet, and even fell to around US$49,000 a few days ago (August 5).
If the market continues to follow this scenario, BTC may continue to consolidate in the current range for a period of time, and it is not ruled out that it will continue to fall, and then there will be a sharp and rapid rise and reach a new ATH. At the same time, some altcoins will also take over and usher in the last wave of skyrocketing opportunities.
If this world is really a huge makeshift troupe, then performing according to the script is the best option.
Of course, the above is just an assumption based on historical data. The market is unpredictable. Perhaps the script may be improved to surprise people. For example, will BTC rise sharply instead of staying sideways for too long?
But even if we are about to usher in a real bull market, it is estimated that it will not last too long, because compared with the previous rounds of bull markets, there are too many narratives and projects in this round, liquidity has undergone fundamental changes, and the so-called sector rotation will become more rapid and difficult to control.
So far in this cycle, we roughly estimated that the most popular AI narrative has only lasted for about 150 days in total, and then MemeCoin began to occupy a sustained dominant position. Although many new narratives have emerged during this period, such as the BTC ecosystem (inscriptions, runes, etc.), TG Bots, ERC404 (Pandora), etc., these narratives have lasted for a relatively short time, and some have ended in less than two weeks.
As for when the big bull market will come, I don’t know, maybe it will start next month (September-November), maybe in the first half of next year (March-June), maybe in the second half of next year…
Therefore, in the next 300 days or so, if we really have the opportunity to usher in a short-term bull market, then you must remember to make necessary profit-taking, because the narrative altcoins you hold may not leave you with many opportunities (time) to exit, and the increase is not expected to be that large. If you still hold the mentality that the altcoins you hold will increase 100 times in the future, then your risk factor will become very high.
As for me, I will continue with my previous plan:
- BTC
When BTC reaches around $100,000, I will sell it in batches, and the unsold ones will be stored in cold wallets. If BTC does not reach around $100,000 in this bull market, I will continue to hold it. At most, I will hold it for a few more years until the next bull market. This has basically no impact on me.
- Altcoins
As for the altcoins I hold, I will consider liquidating them in batches when the total market value of altcoins reaches about 2 trillion US dollars. If it doesn’t reach that, it doesn’t matter, because the altcoins I bought and held in this cycle have already been reduced before, and they are currently at zero cost. Although there is no profit (only floating profit), there is no pressure to hold positions. I have also shared these in my previous articles.
We will share the content of this issue here. For more content, you can view the article directory on the homepage of Hua Li Hua Wai. The above content is only a personal point of view and analysis, which is only used for learning records and communication, and does not constitute any investment advice.
