Solana is the native cryptocurrency located on the blockchain of the same name and is currently one of the world’s best-known and strongest digital assets. As of 2024, SOL had one of the most extensive market capitalization levels in the world at approximately $110 billion, which is no small thing considering that the coin is relatively new, having been built in 2017. The system started as an open-source project and is currently run by the Solana Foundation. While this organization is based in Switzerland, the blockchain was built in San Francisco by the Solana labs.
Although it isn’t as big as Bitcoin, SOL has become a favorite among investors from all over the world, with many of them looking into the latest solana crypto price prediction in order to create a trading strategy that is based on more objective factors rather than pure feeling. Since the beginning of November, the crypto environment has recorded one of the strongest rallies in its entire history, and the effects have been felt across the marketplace. Solana is one of the coins that was impacted as well.
Bull run
The fourth quarter of the year has historically been associated with growing prices by crypto investors and analysts, but even those who have been part of the market for a long time weren’t prepared for what the Q4 of 2024 had to offer. Solana surged to a new all-time high on November 22nd, reaching $264.50, a movement that was propelled by Bitcoin’s rally that took it far above $90k and shows no signs of stopping until a six-figure value is reached. When BTC is doing well, all crypto coins tend to record very strong performance, so the fact that Solana’s price increased didn’t exactly come as a surprise.
Another reason for the bull run is the ongoing frenzy around memecoins, a subcategory of cryptocurrencies that is largely based on internet culture hypes and trends. Solana is known for its involvement with these asset classes, and several of the ones hosted on its blockchain gained more than 100% in value during the last month. As a result, most investors are looking forward to Solana climbing to $300, while the most optimistic believe a level as high as $350 is possible. During the penultimate week of November, SOL sustained $6 billion in daily decentralized trading activity, securing a sizable 45% share of the larger crypto ecosystem.
The memecoin frenzy has led to record activity levels on the decentralized applications hosted on Solana, with the network currently boasting a TVL of $9.2 billion. To put things in perspective, the combined total value locked across several ETH layer-2 solutions, namely Polygon, Base, Arbitrum, Blast, Linea, and Optimism, is also $9.2 billion. SOL managed to achieve this level by offering lower entry barriers for users and being the faster solution for transactions by a long shot.
Market conditions
Apart from Solana, all other blockchains in the top ten have experienced significant declines in their DEX volumes, which is rather striking. Recent data shows that over 29 million unique addresses have been active recently and interacted with DApps on Solana during the second to last week of November. Many investors have been drawn into the crypto environment because of the belief that crypto can bring quick and easy gains. This belief is prevalent among memecoin traders, but there are concerns that influencers can use potentially illicit methods to morph the perspectives of their audiences. Excessive optimism can also influence Solana’s price, and lead to sharp liquidations among futures traders. Even a 5% intraday decline, a figure that is more or less the standard in the ecosystem, can trigger liquidations that are twenty times the average.
Moreover, the crypto environment has steadily become more mature and reliable over the last few years, and many of those who have been involved in the trading environment for a long time don’t want to revert back to a more speculative marketplace. The funding rate for Solana peaked at 4.2% per month on November 22nd, which most investors don’t necessarily see as a cause for concern. The on-chain data might be affected by the low transaction fees, but the activity recorded on the applications and the enduring strength of the futures shows that the bullish run is still going strong, so a price spike above the most recent all-time high is entirely possible.
Solana vs Ethereum
Solana has long been considered one of Ethereum’s most serious competitors, and it’s not difficult to see why. Despite Ethereum’s higher price, Solana has been catching up because of its functionality and the unique features it can offer to its users. ETH is similarly versatile and concerned with technology and innovations, even more so than standard crypto transactions. Both blockchains use smart contract capabilities, making them pioneers in deploying decentralized finance and non-fungible tokens.
Both of them use proof-of-stake consensus protocols. This means that the validators stake crypto coins as collateral to earn rewards. This is part of their earnings that act as an incentive, as without the processes completed by these individuals, the blockchains wouldn’t be functional. Solana has improved this system by adding proof-of-history as well. This protocol lets the blockchain achieve a consensus via the verification of the amount of time that passed between different events, encoding this time into a ledger.
This feature has been part of the Solana white paper from the beginning, aiming to make transactions faster without compromising on their efficiency or security. In fact, much of the hype surrounding Solana (which first began around 2021) was a result of the sheer speed of its system, a serious edge it has over Ethereum. Being able to complete ventures as fast as possible is one of the things that has attracted investors to the crypto market in the first place, so, naturally, any platform that can provide faster transactions is going to be a winner in the community’s eyes.
To sum up, Solana is likely to continue growing in the near future, although it is impossible to predict how this growth will go simply because the crypto world is so volatile. Right now, Solana has a very solid following and is popular with investors, but having a complex strategy to avoid potential losses remains essential.
