Solana price prediction: Polymarket shows confidence that SOL price will hit this key level this year.
The Solana network is currently leading in payment volumes across the top blockchain networks. It even managed to outpace Ethereum, Tron, and BNB chains despite their robust activity. But what is driving those volumes?
It is noteworthy that the Solana network is currently leading in payment volumes. The network has historically held a stronghold on DeFi activity, mostly during bullish phases.
Network activity on Solana tends to cool during bear markets or crypto winters. It was thus surprising that the Solana network was outperforming its peers in payment volumes, especially during the latest downturn.
While transaction volumes were on the rise, activity within the Solana cooled off substantially over the last few weeks. This cool-down was consistent with declining retail activity, as is historically observed during bear markets.
For context, daily active addresses peaked above 3.2 million in the first half of February and have since cooled to around 2 million. Similarly, the daily transaction count peaked at over 103 million during the first week of August. Besides, the latest figures were in the 78 million transactions range.
Declining network activity hardly makes for ideal conditions to support a positive growth rate. The volumes may have been linked to recent reports revealing that Solana is now PayPal’s primary rail for the PYUSD stablecoin.
The Solana network has also been winning in terms of attracting institutional adoption. This was mostly courtesy of its lower transaction fees and high transaction throughput.
Speaking of institutional appeal, Solana has also been winning positive remarks for ETF flows. Solana ETFs appeared to be less affected by the ongoing market conditions compared to ETH and BTC ETFs.
One of the best examples of this outcome is that Solana ETFs have had only 2 days of negative flows since the start of February. For context, Bitcoin ETFs have been in the red for 7 days while Ethereum ETFs have had outflows for 8 days so far in February.
One of the key reasons for this observation was that Solana ETFs were launched much more recently than their counterparts. This means they held far fewer and had little incentive to offload the recently acquired coins.
Moreover, Solana ETFs are staking ones, hence the buyers are taking advantage of currently discounted prices. They might be driven by the need to build their holdings for more passive revenue.
Solana crypto has so far maintained a bearish streak since the start of the year. It has so far cooled by 44% from its highest price point in January.
SOL was trading at $82 at press time and had been in a sideways trend over the last 2 weeks. The range bottom was near $77, while the range top was close to $91. The latest support also acted as a support level in January 2024.
The historic support level suggests that it could be a great price point for a SOL price cycle bottom. However, the Solana price prediction on Polymarket suggests the cryptocurrency may drop to $60.
There was an 81% chance that the SOL price would face the next support near $60, according to the predictions platform. $60 happens to be the next consolidation zone for SOL price. It hovered around this price level in November 2023.
So far, the markets remain heavily subdued, with the bears in control. Weak sentiment suggests a high risk of capitulation, but discounted prices and rising transaction volumes may fuel organic demand.
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