Solana Price Prediction: Will SOL Overcome Current Hurdles to Reach $450?

Solana’s price recently hit resistance at $245, as Bitcoin surged past $100,000 for the first time. Despite Solana's growth potential, profit-taking trends and declining staking deposits have raised concerns about its short-term trajectory. Could SOL still achieve the $450 year-end target analysts are forecasting? Let’s explore.

SOL/USDT price chart | Source: KuCoin

Bitcoin’s breakthrough above $100,000 was fueled by optimism over crypto-friendly changes in the U.S. SEC. This milestone triggered a rally across altcoins, including Solana. However, SOL’s price growth was limited compared to Bitcoin’s.

• Current Price: $240 (down 9% from an all-time high of $264 on Nov. 23).
• Resistance Levels: SOL faces significant resistance at $250, highlighted by the Chande Kroll Stop indicator.
• Support Levels: If SOL fails to hold above $230, it could retest the $224 support zone.

Profit-taking is evident as 2.2 million SOL (valued at $500 million) was unstaked in the past week. This withdrawal reduces staking deposits, increasing SOL’s circulating supply and weakening buying pressure.

Impact of Unstaking $500 Million Worth of SOL

• More Tokens in Circulation: The withdrawal of such a significant amount of SOL increases the token's availability in the market. With a higher circulating supply, the balance of demand and supply shifts, potentially capping price growth.
• Downward Pressure on Prices: The introduction of 2.2 million unstaked SOL into circulation creates an overhang in the market. If these tokens are sold, it could further amplify selling pressure, especially during a profit-taking phase.

Read more: How to Stake Solana with Phantom Wallet

1. Ecosystem Growth

Solana’s low fees and scalability make it a preferred blockchain for developers. Key drivers:

• DeFi and NFTs: Platforms like Magic Eden and Raydium showcase its potential. The NFT space, in particular, has seen increased activity, with Solana often ranked among the top chains for NFT sales volume due to its speed and cost-efficiency. In November 2024, NFT sales volume surged to $562 million, of which Solana accounted for over $83 million, according to a report on Bitcoin News.
• Web3 and Gaming: Solana’s fast transaction times make it ideal for blockchain-based games, where instant interactions are crucial. Popular gaming platforms are integrating Solana to leverage its scalability for in-game economies.
• Institutional Interest: Institutional adoption is growing, with Solana being considered for tokenized assets, payment solutions, and blockchain-based gaming by major financial players. This lends credibility and attracts further investment to its ecosystem.

Read more: How to Use the Raydium (RAY) Decentralized Exchange on Solana: A Beginner’s Guide

2. Phantom Wallet Integration with Transak

Phantom's integration with Transak, launched in December, has boosted Solana’s network activity:

• 400% Growth: Seven weeks after the integration, SOL transactions via Transak surged by 400%, reflecting increased demand for Solana-based assets. This surge is attributed to the streamlined user experience and multi-payment options offered by Transak.
• Wider Adoption: Transak supports over 20 payment methods and processes up to $75,000 per transaction in select regions. With Phantom already serving users in 100+ countries, this partnership strengthens Solana’s market presence by providing a seamless bridge for fiat onboarding.

3. Analyst Optimism

Other expert analysts predict $450 for SOL, citing:

• Solana can handle 65,000 transactions per second (TPS), a staggering figure compared to Ethereum’s 15–30 TPS. This scalability attracts developers looking for cost-effective solutions to build decentralized applications. The low cost of transactions—fractions of a cent—gives Solana a competitive edge, especially for high-frequency trading, gaming, and micropayment applications. In mid-November, Solana’s real economic value (REV) outpaced Ethereum’s by 111%, including transaction fees and maximal extractable value (MEV) for validators, according to a report on Cointelegraph. 
• Institutional players are increasingly exploring Solana for tokenized assets, blockchain-based payments, and high-value gaming platforms. This endorsement from large-scale investors boosts confidence in Solana’s long-term growth potential.
• Solana’s integration into emerging Web3 applications, including social networks and decentralized autonomous organizations (DAOs), positions it as a leader in blockchain innovation.

1. Declining Buying Momentum

The Bull Bear Power (BBP) indicator, which tracks the balance between buying and selling pressure, remains in negative territory for Solana. This signals that bearish sentiment is overshadowing bullish sentiment, dampening enthusiasm among traders and investors.

• Key Concern: Without a significant uptick in trading volume or a catalyst to reignite investor confidence, Solana may struggle to break through the $250 resistance level.
• Implications: A prolonged lack of buying pressure could make SOL more vulnerable to downward price movements, especially if broader market sentiment turns bearish.

2. Profit-Taking Trend

Solana has seen a substantial amount of profit-taking activity following its recent all-time high of $264. On-chain data reveals that 2.2 million SOL, worth $500 million, was unstaked over the past week.

• Impact of Unstaking:
1. Increased Circulating Supply: Unstaked SOL reenters the market, diluting demand and potentially suppressing prices.
2. Weakened Network Confidence: Staking is a measure of investor commitment to a blockchain. A decline in staking deposits may signal reduced long-term confidence in Solana.

This profit-taking trend is particularly concerning because it coincides with Bitcoin’s historic $100,000 milestone, which should have generated stronger altcoin momentum.

3. Solana Ecosystem Scandals

Ecosystem reliability is a critical factor for blockchain success, and recent controversies have raised red flags for Solana. Two major incidents highlight potential risks:

Pump.fun Controversies

Pump.fun, a decentralized memecoin launchpad platform on Solana, has faced significant scrutiny despite its massive revenue growth and dominance in the Solana DEX market. Issues include:

• Manipulation and Exploitation: Traders and bots have exploited Pump.fun’s algorithms to manipulate token visibility and prices. Practices like “bump trades” and “rug pulls” undermine the platform’s credibility.
• Explicit Content Scandals: Pump.fun’s livestream feature was abused to broadcast disturbing content, leading to community backlash and feature removal.
• Reputation Risk for Solana: With Pump.fun accounting for over 62% of Solana’s DEX transactions, its controversies tarnish the blockchain’s image and may deter potential users and investors.

@solana/web3.js Security Breach

A recent backdoor incident involving the widely used @solana/web3.js npm package has raised serious security concerns:

• Scope of the Issue: The compromised package allowed attackers to steal private keys and drain funds from affected decentralized applications (dApps).
• Financial Impact: Early estimates suggest losses of $130,000, primarily affecting developers running backend bots with private key access.
• Reputational Damage: While non-custodial wallets were unaffected, the incident highlights vulnerabilities in Solana’s developer ecosystem, potentially discouraging future adoption.

1. Upside Potential:
• A close above $250 could signal a breakout to $270 or higher.
• Year-end target: Analysts remain optimistic about $450 if adoption accelerates.
2. Downside Risks:
• Failure to hold $230 could see SOL retest $224.
• Continued staking outflows could limit near-term gains.

Solana’s ecosystem and adoption trends support its long-term growth, but short-term challenges like profit-taking and declining staking deposits are creating hurdles. While $450 remains achievable, breaking the $250 resistance is critical for sustained momentum.

For now, cautious optimism prevails as investors watch whether Solana can capitalize on its strong fundamentals to overcome these headwinds.

Read more: What Is a Solana ETF, and How Does It Work?