Solana, one of the major figures in the crypto sector, is once again at the center of attention. After a year marked by strong fluctuations, its native token, SOL, posted a spectacular rise. In fact, it crossed the symbolic mark of 230 dollars. This rebound does not go unnoticed, because it occurs in a context where the market is in turmoil, driven by speculation around the possible approval of a Solana ETF in the United States. This prospect has sparked renewed interest among investors, bolstered by bold predictions, including a $750 price target set by Bitwise.
The catalytic effect of a potential ETF and optimistic forecasts
On December 10, the price of SOL rose dramatically by 13%, reaching $230 after falling to a low of $203.30 a few days earlier. This significant rally is largely driven by optimism surrounding the possible approval of a Solana ETF in the United States. Such a development is seen as a major breakthrough that could attract an influx of institutional investment. Bitwise, a provider of crypto financial products, highlighted this strategic issue in a publication on the social network X (formerly Twitter) on December 11, 2024. This company noted that “acceptance of an ETF could revolutionize the adoption of Solana and make it more accessible”. At the same time, the company has set an ambitious target for SOL, as it believes its price could reach $750 in the near future.
This renewed interest in Solana has also been reinforced by recent regulatory developments. The resignation of Gary Gensler, chairman of the SEC, has revived hopes for more favorable measures for the crypto industry in the United States, which has consolidated investor confidence. Furthermore, derivatives market data show a more stable situation. Funding rates fell, while heavily leveraged positions were liquidated, creating market conditions deemed healthier. These combined factors, coupled with the resilience of the Solana network, have allowed its native token to reach unexpected heights, marking a recovery that many see as promising for the months to come.
Increased volatility and emerging structural weaknesses
Despite the euphoria created by the recent rise in the SOL, certain indicators qualify this optimism. First, on-chain transaction volumes on the Solana network recorded a 63% drop in the week ending December 8. This decline, although it also affects other blockchains such as Ethereum and Avalanche, raises questions about user engagement. Thus, this trend seems to reflect a temporary disinterest in SPL tokens, a segment particularly affected by this dynamic. For example, tokens such as BONK and Dogwifhat lost 9% and 8% of their value respectively during the same period, while other projects like Jupiter and Wormhole saw similar declines. These figures suggest that the recent surge in SOL price may rely more on speculative moves than sustained fundamental adoption.
Furthermore, the impact of so-called maximum extractable value (MEV) strategies, in particular sandwiching, should not be underestimated. These practices, which involve inserting trades before and after a targeted trade to take advantage of price fluctuations, have exacerbated volatility in the Solana market. An analysis of WazzCrypto published on platform These behaviors profoundly affect confidence, particularly among small investors who are hesitant to take on more exposure. Although Solana derivatives markets are showing encouraging signs, such as a stabilization of funding rates and a reduction in excessive positions, these elements call into question the sustainability of the recent rise of SOL and the underlying fundamentals to this renewed interest.
Solana continues to impress with its ability to bounce back and the opportunities it offers, including prospects such as potential ETF approval and ambitious pricing forecasts. However, there is no shortage of challenges. The fall in on-chain volumes and the impact of trading strategies such as sandwiching highlight weaknesses that could slow down its progress. In this context, investors must be cautious, remembering to carefully weigh opportunities against risks. While optimism appears justified in the short term, the sustainability of this trajectory will depend on evolving fundamentals and the network's ability to inspire sustained confidence in such an unpredictable market.
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