Solana (SOL) is navigating significant volatility, reflecting broader corrections across the cryptocurrency market. The recent decline comes as investors await the Federal Open Market Committee’s (FOMC) decision on interest rate cuts, heightening caution across the board.
Despite the dip, Solana has showcased notable potential, with its native token, SOL, recently surging to a record high of $295, fueled by meme coin mania linked to Donald and Melania Trump.
At press time, Solana is trading at $228, marking a daily loss of over 3%. On the weekly chart, the cryptocurrency has shed 11% of its value. This uncertainty has propelled Solana into the spotlight of cryptocurrency discussions, with analysts closely monitoring its next moves.
Picks for you
ChatGPT sets Solana price for Q1 2025
To assess Solana’s future potential, Finbold analyzed market data and sought insights from OpenAI’s advanced ChatGPT-4o model, which outlined both bullish and bearish scenarios for the token.
The bullish projection points to a potential rally toward $280, influenced by macroeconomic improvements, ecosystem expansion, and recovering market sentiment. Conversely, the bearish scenario highlights risks tied to declining network activity and broader market pressures, which could weigh on Solana’s performance and push its price down to $200.
Bullish scenario: SOL surges to $280
ChatGPT noted that a combination of favorable macroeconomic developments and ecosystem expansion could influence Solana’s near-term trajectory. The potential approval of spot Solana exchange-traded funds (ETFs) could act as a catalyst, attracting significant institutional interest and liquidity.
The ETFs, filed by major players such as Bitwise, VanEck, and 21Shares through the Cboe BZX Exchange, would position Solana alongside Bitcoin (BTC) and Ethereum (ETH) as a key investment option in traditional markets.
Derivative market data also signals growing optimism. Solana’s options market has seen a 24.62% increase in volume and a 1.62% rise in open interest, indicating increased speculative activity. Higher long/short ratios on major exchanges like Binance and OKX, at 3.9068 and 4.09, respectively, further reflect confidence in Solana’s recovery.
If these trends persist, combined with a broader market recovery, the AI model notes that Solana could rally to $280 by the end of Q1 2025.
Bearish scenario: SOL drops to $200
However, ChatGPT also identified potential risks that could limit Solana’s growth. Prolonged market uncertainty, particularly if the FOMC decision results in unfavorable economic conditions, could weigh heavily on cryptocurrency sentiment.
The AI further pointed to declining on-chain activity and a drop in Total Value Locked (TVL) as indicators of waning user interest. In less than a week, Solana’s TVL fell by 6.3%, from $12.12 billion on January 24 to $11 billion, with major protocols like Jito and Raydium contributing to the decline.
Moreover, daily transactions on the network declined sharply, dropping to 62,945 as of January 28 from 71,738 on January 23, reflecting reduced user engagement and network activity.
Derivative data adds to the cautious outlook, with Solana’s trading volume plunging by 25.57% to $9.36 billion and open interest in futures declining by 3.15%. Additionally, $12.12 million in liquidations over the last 24 hours, primarily from long positions, further indicates caution among traders.
These factors, coupled with macroeconomic headwinds, could see SOL struggle to maintain its value, potentially dropping to $200 by the end of Q1 2025.
That being said, Solana’s price trajectory remains uncertain, with its fate hinging on key developments in the coming months. Investors and analysts will closely monitor the interplay between regulatory decisions and market trends as Q1 progresses.
Featured image via Shutterstock
