Solana price prediction: at risk despite rising transactions, ETF inflows

Solana price remained in a deep bear market this month, falling to a low of $120, its lowest level since April 25. It has plunged by over 50% from its highest point this year, shedding billions of dollars in value, despite some major catalysts.

Solana’s network is beating its key rivals 

The SOL token price has been in a strong downward trend in the past few months, a move that has coincided with the ongoing crypto market crash.

It has crashed despite the chain having some major catalysts, including its rising transactions and fees.

Third-party data shows that Solana handles the most transactions, partly because of its strength in the meme coin industry. Its monthly active users (MAU) stand at 98 million, much higher than BNB Chain’s 26 million and Ethereum’s 8 million.

Solana also handles more transactions than other networks. It has handled over 34 billion transactions in the last 12 months, much higher than Ethereum’s and BNB Chain’s 516 million and 4 billion, respectively.

Nansen data shows that Solana’s market share in terms of transactions has continued growing in the past few weeks, soaring to over 1.8 billion. These transactions are much more than those handled by the other large chains, combined.

Solana also made more money than other chains, with its fees soaring to $728 million, much higher than Ethereum’s and BNB’s $601 million and $260 million, respectively. Most of this growth happened in the first half of the year as the meme coin boom happened.

Meanwhile, more data shows that Solana was the most active networks in the decentralized exchange (DEX) industry. Its DEX volume in the last 12 months rose to $1.6 trillion, also much higher than the other chains.

SOL ETF inflows are rising

Solana’s network is also benefiting from the ongoing ETF demand. Data compiled by SoSoValue shows that SOL ETFs added $66.5 million in inflows last week, bringing its cumulative inflows to $742 million and its total assets rising to $946 million. These funds have had inflows in the last eight consecutive weeks.

Looking ahead, Solana is working to implement its Alpenglow upgrade, which will boost its performance. It will increase the network’s maximum throughput from 65,000 to 107,000 transactions per second (TPS). 

Alpenglow will cut its consensus finality from 12.8 seconds to 100-150 milliseconds, which will be faster than a Google search. 

It will also lower its validation costs by 50% and transition from a proof-of-authority to a proof-of-stake, introducing the votor and rotor systems.

Solana price technical analysis 

The daily timeframe chart shows that the Solana token dropped from a high of $252.55 in September to the current $126.57.

SOL token formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other in November.

The token has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. It has moved slightly below the lower side of this pattern.

Solana price has moved below the Supertrend indicator, a sign that the token will continue falling. Therefore, the token will drop to the key support level at $95, its lowest level in April this year. A move above the 50-day moving average at $142 will invalidate the bearish outlook.

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