Solana (SOL) was one of 2024’s top-performing cryptocurrencies, surging from $100 at the start of the year to $235 by early December—a staggering 135% gain.
In the last month alone, SOL added 19% to its value, driven by bullish sentiment across the market. Analysts are now setting their sights on a $420 target, underpinned by growing network activity, institutional adoption, and Bitcoin’s rally beyond $100,000.
However, regulatory challenges remain a hurdle, with ETF rejections casting a shadow over what has otherwise been a stellar year.
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Regulatory hurdles for Solana ETFs
Despite its strong price performance, Solana has faced significant regulatory hurdles. The U.S. Securities and Exchange Commission (SEC) recently rejected applications for spot Solana ETFs filed by major players like VanEck, 21Shares, and Canary Capital.
Notably, crypto asset manager Grayscale also recently applied to convert its Solana Trust into a spot exchange-traded fund.
With President-elect Donald Trump appointing Paul Atkins, a pro-crypto policy expert, as the incoming SEC Chair, optimism is growing. Analysts expect the leadership transition in January 2025 to pave the way for broader ETF approvals, potentially benefiting Solana and other cryptocurrencies.
Institutional confidence soars despite challenges
Institutional interest in Solana remains strong, with Q3 2024 marking $173 million in investments across 29 decentralized applications (DApps)—a 54% quarter-over-quarter increase, according to Messari.
This surge underscores institutional confidence, further bolstered by prominent players like Franklin Templeton, which is launching an SEC-compliant money market fund on Solana.
Additionally, Société Générale’s SG-Forge has announced plans to deploy a MiCA-compliant stablecoin on the network.
The growing confidence is also visible in Solana’s on-chain activity. Average daily fee payers increased by 109% quarter-over-quarter to 1.9 million, while new fee payers surged by 430%, reaching 1.3 million.
Memecoin mania drives ecosystem growth
A resurgence in meme coins has also significantly boosted Solana’s ecosystem. Tokens like Goatseus Maximus (GOAT) recently captured market attention, driving daily transaction fees to $4 million and pushing active addresses above 8 million.
This activity has also contributed to Solana’s Total Value Locked (TVL) reaching a two-year high of 41 million SOL, a 13% month-over-month increase.
In contrast, Ethereum (ETH) and BNB Chain (BNB) saw relatively flat TVLs during the same period. Decentralized platforms like Raydium and Sanctum have also reported notable deposit increases, further showcasing the network’s growing appeal.
The path forward for Solana
With regulatory clarity anticipated to improve in 2025, Solana is poised to capitalize on its expanding ecosystem and robust on-chain activity. Analysts have grown increasingly optimistic about Solana’s prospects.
Notably, analyst Gordon highlighted Solana’s strong bullish trajectory, underpinned by its consistent respect for an upward-sloping trendline that has provided critical support throughout 2024.
Recently, SOL decisively broke above a key resistance between $220 and $230 and retested it as a strong support zone, further solidifying its bullish momentum.
This breakout was accompanied by a significant surge in trading volume throughout November, indicating robust buying interest. The rally aligns with broader market optimism fueled by Bitcoin’s climb past $100,000 and growing institutional confidence in Solana’s expanding ecosystem.
Analysts project Solana’s next price target at $420, a level that seems attainable given its robust technical setup and favorable macroeconomic backdrop. However, any breach below the critical upward-sloping trendline could undermine the bullish momentum, prompting a potential retest of lower support levels and raising caution among traders.
If Solana maintains its momentum and benefits from improving regulatory clarity, it is well-positioned to achieve the $420 target, likely within the first quarter of 2025.
Featured image via Shutterstock
