In the world of cryptocurrencies, where volatility is an everyday occurrence, investors are captivated by the recent price activity of Solana. Following a significant drop in value, the SOL token of Solana has gained strength, raising questions about its future price. Understanding this dynamic requires looking at the latest events and network improvements that could map out a roadmap for further price development.
Solana, known for its innovation and efficiency in the world of cryptocurrencies, has once again found itself in the spotlight. After encountering strong price resistance at the $102 level, the SOL token experienced a 23% correction, reaching a 5-week low of $78.60. However, this trend reversed quickly as the SOL price rebounded by 10% within just 24 hours.
A contributing factor to this rise could be the recently introduced ‘token extensions’ in the Solana network. These allow for confidential transfers, hiding balances, and charging fees at the protocol level. These innovations, introduced in version v.1.17 of the Solana Labs validation client, are designed with corporate applications and regulatory compliance in mind.
Another source of optimism is Firedancer – a promising new validation client developed by Jump Crypto. Its aim is to enhance Solana’s processing capabilities to millions of transactions per second and support for parallel data processing (sharding). The stability of the Solana network, after many outages in 2022, has significantly improved, which was evident throughout 2023.
The first wave of successful SPL Solana token airdrops, which reached centralized exchanges in December 2023, also influenced the demand for SOL tokens. Among them were the Jito (JTO) staking solutions and the memecoin BONK. This triggered an increased demand for SOL tokens, as users hurried to participate in these airdrops.
Despite a 28% drop in the price of the SOL token over the last 30 days, Solana’s DApp indicator showed strength in January, with a total value locked (TVL) reaching 15.3 million SOL. The Solana network experienced a significant increase in transaction activity and volumes, although it still lags behind rivals such as Ethereum or BNB Smart Chain in absolute numbers.
The potential of the network is highlighted by Jupiter Exchange, which achieved 387,780 active addresses in 7 days, and Raydium with 190,650 users. For comparison, PancakeSwap, the leading DeFi app on the BNB Chain, gathered 263,010 active addresses in the same period, while Uniswap on Ethereum reached 64,890.
It cannot be unequivocally stated whether the recent rebound of the SOL price to $80 is just a reflection of increased demand for airdrops and newly introduced ‘token extensions’. However, the solid demand for DApp activity in the Solana network gives some degree of certainty that the path to reaching $90 and higher is possible.
The cryptocurrency market is volatile, and the future price of any token remains a matter of speculation. However, given the recent technological development and increased interest in the Solana network, the path to achieving higher prices seems more realistic than ever. Will SOL break the magic barrier of $90? Time will tell, but for now, all eyes are on Solana.
