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Solana’s SOL coin is currently trading around the $40 level — its lowest point since August 2021.

Bearish sentiment continues to weigh on crypto markets. The Solana blockchain is facing ongoing challenges – the latest being a lag in the block time, which has implications for block rewards.

What is Solana and what has been happening with the blockchain’s native coin?

In this article, we look at the project’s latest developments and price expectations for SOL.

Solana builds out Ethereum-alternative ecosystem

Unlike many other popular blockchains that operate using Proof-of-Work (PoW) or Proof-of-Stake (PoS) algorithms, Solana was among the first to introduce a Proof-of-History (PoH) algorithm, which allows the blockchain to operate quickly while staying secure and decentralised.

Founded in 2017 by former Qualcomm (QCOMM) employee and Dropbox (DBX) software engineer Anatoly Yakovenko and his colleague Greg Fitzgerald, Solana’s main goal was to create an open-source project that implemented a new, high-performance permissionless blockchain.

Because of its PoH algorithm, the Solana blockchain can process 2,000 transactions a second, marking it as a competitor to Ethereum (ETH), the second highest cryptocurrency by market capitalisation. Ethereum has become the leader in decentralised finance (DeFi) due to its compatibility with smart contracts, which enable the building of decentralised applications (dApps).

However, Ethereum’s popularity has also made the blockchain expensive and slow to use, which has encouraged the emergence of alternative networks like Solana.

According to Solana’s official website, the platform is “the fastest blockchain in the world and the fastest growing ecosystem in crypto, with thousands of projects spanning DeFi, NFTs, Web3 and more.” In addition to being fast, Solana also boasts average fees of less than $0.00025.

Solana’s ecosystem covers a number of lending protocols, DeFi projects, NFT marketplaces, Web3 apps and decentralised exchange (DEX) projects. It also includes Phantom, a Solana wallet built for DeFi and NFTs, and Audius, a decentralised music sharing platform.

Solana is powered by its native cryptocurrency, SOL, a token running the ERC-20 standard. SOL is used to pay for transaction fees and any purchases in the Solana ecosystem, as well as for staking.

At the time of writing, the total supply of SOL cryptocurrency tokens exceeded 511 million, with over 342 million tokens in circulation, according to data provided by CoinMarketCap. With the token trading just over $40, SOL had a market capitalisation of over $13.7bn, making it the 9th-largest cryptocurrency, behind the likes of BNB, ADA and XRP.

On 29 March 2022, Solana launched Solana Pay, a “build your own online store” application on its blockchain. It allows users to create a storefront and accept low-fee, global payments directly into their wallets without the need for a bank or credit card.

Since launching, over 600 merchants have engaged with Solana Pay. Others have begun to incorporate the ecosystem into their payment flows, thus encouraging space for new investors to join the blockchain.

On 12 April, the SOL token was listed on popular trading platform Robinhood (HOOD). While the move was expected to increase trading interest in the coin, it has so far been unable to support the SOL price.

With Tesla (TSLA) CEO Elon Musk making waves with his offer to buy Twitter (TWTR), FTX CEO Sam Bankman Fried outlined in a Twitter thread how the social media app could run on a blockchain such as Solana.

1) FWIW, some thoughts on what a decentralized Twitter might look like:

— SBF (@SBF_FTX) April 14, 2022

Solana’s developers have hinted at wanting to work with Musk in the past, replying to his tweets.

???? dms are open

— Solana (@solana) May 12, 2021

Some of the biggest SOL coin news came as the platform announced a change in the leadership of its Solana Foundation Council on 18 April. The council was established in 2020 with the aim of advancing the adoption of decentralised technologies as a public good, and has since been helping develop the Solana ecosystem.

On 23 June, Solana Mobile, a subsidiary of Solana Labs, unveiled Saga — a flagship Android mobile phone with features “integrated with the Solana blockchain, making it easy and secure to transact in web3 and manage digital assets, such as tokens and NFTs.”

Solana co-founder Anatoly Yakovenko revealed the device at an event in New York last week. The Saga wasn’t the only big unveiling of the night — Yakovenko also announced the launch of the Solana Mobile Stack (SMS) software ecosystem, which provides tools for developing native Android mobile apps, walls, and games, and includes a decentralized app (dApp) store.

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As per a tweet from the company on 26 June, the device has seen over 1900 preorders so far. The Saga is planned to be released in early 2023.

Since Thursday afternoon you’ve…

Placed 1,900+ preorders Downloaded the SDK 4,000+ times And 12,000 have signed up

Join them at https://t.co/6D4PQHZVlu

— Solana Mobile (@Solanamobile) June 26, 2022

Network jitters weigh on the SOL price

It’s important to note that the Solana blockchain is prone to network outages. During March and April 2022, Solana suffered nine such outages, seven of which were determined as “major”.

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A status update on the Solana website on 26 May showed that the blockchain had fallen “approximately 30 minutes behind that of wall clocks, due to longer-than-normal block times. While this has no impact on performance or network operations, the time reported by block explorers and dapps may not reflect wall-clock time.”

While the lag didn’t affect the blockchain’s operation, it could have an impact on annual staking rewards. Solana pays rewards to stakers on each epoch, which has 432,000 blocks. Based on Solana’s designed block time of 400 milliseconds, there should be 182 epochs in a year, but longer block times would reduce the number of epochs, leading to reduced earnings.

The SOL/USD price dropped in response to the update, from $47.98 on 25 May to $43.49 on 26 May and $40.98 on 27 May. The price chart shows SOL fell below $50 on 11 May, as cryptocurrency markets suffered from the impact of the collapse of the Terra UST and LUNA tokens and the US Dollar Index (DXY) hit a 20-year high.

The blockchain’s most recent outage came on 1 June 2022, lasting more than four and a half hours, according to Solana status. It was the first outage in the past month, with the previous outage occurring on May 1, 2022.

The SOL token dropped from $45 on 1 June to as low as $38.43 on 2 June. SOL has since been attempting to stabilise around the $40 mark.

The coin has fallen a long way from its November bull run when it peaked at an all-time high price of $260.06 on 6 November, SOL coin price history shows.

Will the SOL token price be able to move back above $50 in the short term or is there scope for further downside?

Below, we look at some of the latest Solana forecasts.

Solana price prediction: what’s the outlook for 2022-2030?

Technical SOL coin analysis from CoinCodex was bearish at the time of writing on 27 June, with 20 indicators showing bearish signals compared with 8 bullish signals. The stochastic relative strength index (RSI) and Hull moving average both showed sell signals, while the majority of the oscillators, such as the RSI, Average Directional Index and the moving average convergence divergence (MACD) remained neutral.

CoinCodex’s SOL price prediction indicated that the coin could drop 7.58% to $ 36.40 by 2 July.

WalletInvestor remained relatively bullish in its short-term Solana price prediction for 2022. The algorithm-based forecast website projected that the coin could trade up to $42.041 by the end of the year. For the long term, the site’s SOL prediction showed the price crashing to $1.367 by the end of 2023, rising slightly to $1.769 by the end of 2024, and dropping further still to close 2025 at the $0.361 mark. In five years, according to the platform, the coin could trade at $3.529.

DigitalCoinPrice projected a much more bullish scenario in its Solana crypto price prediction. Based on historical figures, the crypto data provider indicated that the price could average $56.04 in 2023, up from $51.55 in 2022, rising to $61.93 in 2024, $75.48 in 2025, and $180.21 in 2030.

The SOL coin price prediction from CoinPriceForecast also expected a slower upward trajectory. The projection showed that the coin could fall to $33.39 at the end of 2023 from $35.46 in 2022, then rise to $52.59 by the end of 2025 and $77.89 by the end of 2030.

Price Prediction’s SOL crypto price prediction remained unchanged from early June. Based on deep artificial intelligence-assisted technical analysis, the website estimated that the price could rise from an average of $61.46 in 2022 to $88.44 in 2023 and $179.57 in 2025, then accelerate to $1,208.77 in 2030.

When looking at forecasts for the SOL coin’s future price, it’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to come up with a long-term target price. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.

If you are considering investing in cryptocurrency tokens, we recommend that you always do your own research to potentially identify a realistic Solana coin price prediction. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.

FAQs

Is SOL coin a good investment?

In very volatile cryptocurrency markets, it is important to do your own research to determine if it is a good fit for your investment portfolio. Whether the SOL token is a suitable investment for you depends on your risk tolerance and how much you intend to invest. Always do your own research. And never invest money that you cannot afford to lose.

Will Solana coin go up / down?

At the time of writing (27 June), the majority of algorithm-based forecasters projected that the SOL price could rise in the future. However, predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing.

Why has the SOL coin price been increasing / going down?

The SOL token price has been falling as cryptocurrency markets have turned bearish, and the Solana blockchain has been facing ongoing technical issues.

How high can SOL coin go?

At the time of writing, the most bullish forecast from PricePrediction projects that SOL could trade above $1,000 in 2030, while a heavily bearish outlook from WalletInvestor indicates the coin could crash to around $3 in five years’ time. It is worth bearing in mind that forecasters can get their predictions wrong. The wide difference in price predictions emphasises the importance of doing your own research to help you decide which forecasts to believe.

What is SOL coin used for?

The SOL token is the native cryptocurrency for the Solana blockchain, which aims to offer a faster and cheaper smart contract platform than Ethereum.

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