Will Solana Ever Be Able to Reach $190?

Solana’s native token, SOL, has experienced notable fluctuations in recent months. While SOL recently rebounded with a 33.5% increase since hitting $110 on August 5, it faces resistance around $150. The price last traded above $190 on July 29. Analysts have offered a range of forecasts for Solana, with some projecting prices as high as $1,000. However, current network data and fundamental analysis suggest that a more realistic short-term expectation may be around $190. 

Current Price Predictions and Their Basis 

Crypto trader and analyst Kaleo has drawn parallels between SOL’s current price action and Ethereum’s (ETH) performance in 2020, which preceded a significant surge in 2021. Kaleo suggests that SOL could potentially reach $1,000 by 2025, drawing on historical patterns observed with Ethereum. However, this ambitious target raises questions given the current onchain metrics for Solana. 

Onchain Metrics and Market Conditions 

Despite the bullish outlook, recent onchain data indicates a decrease in Solana network activity, which is typically a negative indicator for a potential bull run. The SOL price reaching $1,000 would require a market capitalization exceeding $500 billion, a valuation that only a few of the largest publicly traded companies have achieved, such as Costco and Bank of America. This makes such a scenario appear improbable under current market conditions. 

Short-Term Target of $300 Appears More Plausible 

A more conservative yet still optimistic target for SOL is $300, representing a 104% gain from its current price of around $147. This target reflects potential growth driven by several factors. Notably, there are ongoing applications for Solana spot exchange-traded funds (ETFs) in the United States. Although the chances of these applications being approved are slim, they highlight Solana’s efforts to differentiate itself from competitors. 

Furthermore, in 2024, Solana surpassed BNB Chain to become the second-largest blockchain by total value locked (TVL), with $4.8 billion in deposits. While this figure pales in comparison to Ethereum’s $48.8 billion TVL, it is significant enough to compete in decentralized exchange (DEX) volumes. Over the past week, Solana’s DEX turnover was $9.4 billion, closely trailing Ethereum’s $10.8 billion. 

Comparing Solana to Ethereum’s Layer-2 Solutions 

When assessing Solana’s value proposition, it is important to compare it to Ethereum’s layer-2 solutions rather than Ethereum’s base layer. Solana’s fees are lower than Ethereum’s average transaction fees of $1.80, but users still face significant costs due to high rates of failed transactions and maximal extractable value (MEV). Over the past week, Ethereum’s network fees totaled $13.7 million, compared to Solana’s $8.4 million. 

Comparing Solana directly to Ethereum’s layer-2 ecosystem provides a clearer perspective. Ethereum’s layer-2 ecosystem holds $9.7 billion in stablecoin deposits, surpassing the combined totals of Solana and BNB Chain. Additionally, the number of active addresses on Ethereum’s layer-2 solutions is comparable to Solana’s 1.6 million. The combined fully diluted valuation of Ethereum’s layer-2 tokens—including Optimism, Arbitrum, Polygon, and others—stands at $31 billion. This valuation is over 60% less than Solana’s $85 billion total. 

Sustainability and Future Prospects 

Solana’s reliance on airdrops and memecoin launches has generated short-term demand for SOL, particularly during retail-driven rallies. However, this approach may not be sustainable in the long term. Despite this, projects like Helium, Jupiter, and PayPal’s USD stablecoin on Solana demonstrate growth and adoption on the network. This progress indicates that reaching a price of $190 is a feasible target for SOL, although achieving this in the near term may be challenging due to competition from Ethereum’s layer-2 solutions. 

While some analysts forecast ambitious price targets for Solana’s SOL token, current network data and fundamental analysis suggest that a more realistic expectation is a price of around $190. The potential for SOL to reach higher levels exists, driven by factors such as ETF applications and significant network developments. However, the competitive landscape, particularly from Ethereum’s layer-2 solutions, and current market conditions present substantial hurdles. Investors should consider these dynamics when evaluating Solana’s price potential in the coming months.