Solana Price Prediction: Will SOL Break Out and Hit $500 This Cycle?

• Indicators suggested that SOL looked almost certain to reach $334 to begin with.
• The token’s correlation with ETH was negative, but strong with BTC.

The last seven days, Solana [SOL] price struggled to make an impressive run. According to data from CoinMarketCap, the price of SOL was $167.12 at press time.

This was about the same value as on May 25. On a year-to-date (YTD) basis, SOL is up 52.63%. But it was nothing compared to the token’s performance in 2023.

However, the recent overcast price action hasn’t stopped Solano bulls from betting on an incredible rally. For most SOL holders, the price of the cryptocurrency would not reach anything less than $500 before the end of this cycle.

SOL needs bitcoins not ETH

But the same file also predicted that Solana would break its all-time high of $260 before the end of the first quarter of 2024. However, this did not happen as the closest SOL came to this target was $210 in March.

AMBCrypto analyzed Solano’s on-chain price prediction. First we looked at the correlation with Bitcoin [BTC]and with Ethereum [ETH].

According to data from Dune Analytics, the correlation of SOL with BTC was 0.83, indicating that prices mostly move in the same direction.

For ETH, the value was 0.10, indicating a divergence between the two cryptocurrencies. Therefore, if SOL were to reach $500 in the near term, BTC would have to rise above its all-time high.

Another metric AMBCrypto looked at was social dominance. Social Dominance shows the amount of discussion about the token compared to other cryptocurrencies in the top 100.

Did a good entry appear?

According to Santiment data, Solan’s social dominance was 4.938%. Compared to the highs in March, this value was low.

However, history has shown that low social dominance can be a good buying opportunity. This is because the decrease in conversations about the token means that it has not hit a high level of demand.

So buying SOL around $161 to $168 could be a good entry point before another rally starts. To further reinforce this point, there was an open interest (OI).

OI decreases or increases based on net position. If the indicator increases, it means that money is flowing into the contracts related to the token.

On the other hand, a decline means that liquidity is leaving the market. At press time, SOL’s Open Interest was down to $807.25 million.

In terms of price, this dip suggested that Solana could drop to the underlying support, which was at $161. However, this does not indicate that there will not be an increase in open orders again.

If SOL’s OI exceeds $2 billion, as it did a few months ago, the price could increase by 100%. From the press price, this means that the target of the token could be around $334 in a few months.

Data Says “Enough Purchasing Power”

In addition to the above metrics, AMBCrypto also looked at Solana’s Total Value Locked (TVL). TVL monitors whether market participants are locking or depositing assets into the protocol and withdrawing their capital.

When the metric increases, it means that the network is healthy and participants trust the project to generate a good return. On the other hand, a decrease implies an increase in the number of assets downloaded.

Solana’s TVL was $4.80 billion, according to DeFiLlama data. That was a 20.27% increase over the last 30 days. But the past seven days have not been rosy for the token as some SOL stakes seem to have been withdrawn.

Regardless of the recent drawdown, the TVL chain could reach $8 billion, especially since activity on the network has been much greater than other projects.

If (when) this happens, the demand for SOL could be incredible, possibly leading the price to reach or exceed the $500 mark. In addition, Dune data showed that the circulating supply of stablecoins on Solana is growing.

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Realistic or not, here is SOL’s market cap in ETH terms

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Stablecoins such as USDT, USDC and the recently added PYUSD contributed to this increase.

Here, the increase indicates that the addresses in the chain were armed with enough buying power to send the value of SOL higher.