Solana, along with top cryptocurrencies like Ethereum and Bitcoin, is struggling in terms of spot prices. Following the June 6 crash, prices came under pressure, consolidating the dominant seller position that has held since late May 2024.
Will Solana’s Uptrend Continue?
Even so, some analysts remain optimistic, not only expecting altcoins to recover in future trading, but also predicting that top-five coin Solana will lead the way in the next cycle.
In an article by X, an analyst noted that as long as bulls maintain the current uptrend and reject any attempts at lower lows, SOL will continue to move higher.
Notably, this would continue a trend that stretched through much of the second half of 2023, when the token rose from obscurity to become one of the best performing tokens, even outperforming Bitcoin. Looking at the daily chart, SOL is up 100% from its January 2023 low and about 8x from its September 2023 low.
Despite cooling off somewhat after the rally to highs of $210 in March 2024, the uptrend remains intact. So far, SOL has fallen 25% from the March peak, with the price retesting a key support trendline. Keeping the price above $160 will be crucial as the bulls come under selling pressure in an attempt to reject the bears on June 6.
While technical candlestick patterns support this bullish outlook, there are also favorable developments from a fundamental perspective.
Solana Gains Adoption, But Will Regulators Crack Down?
More and more financial institutions are integrating Solana to future-proof their products. So far, PayPal, Visa, and Stripe all support Solana.
Most importantly, in integrating Solana, which has a theoretical throughput of up to 65,000 transactions per second (TPS), they realized the need to adapt to rapidly changing user preferences, most of which are seeking cheaper and faster transactions.
Meanwhile, despite having the largest network, Ethereum can only process 15 transactions per second, which has a negative impact on transaction fees. Depending on network demand, transferring tokens or executing smart contracts on Ethereum can be expensive. According to YCharts, fees fluctuate widely, rising to more than $50 at one point.
While Solana is quickly becoming the choice of institutions and meme coin deployers, there are ongoing challenges. In a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase, the regulator alleged that Solana is an unregistered security.
At the same time, unlike BTC and ETH, SOL listed on the CME market lacks a developed futures market. The US SEC will take this factor into consideration when approving exchange-traded funds (ETFs), and it may take several years for the product to go online.