Solana’s (SOL) price recently bounced back and reached $146 due to favorable market conditions, as well as clearing up of doubts regarding the project by its co-founder, Anatoly Yakovenko. Yakovenko also dismissed the myths related to the network’s throughput and the transaction fees that can help uplift the investors' morale. As of the time of writing, Solana's
(SOL) trading price was at $141, a 2.52% drop in the last 24 hrs.
Anatoly Yakovenko, the co-founder of Solana, has recently taken the time to explain the transaction fee and the capacity of the network. To dispel the common misconceptions, Yakovenko explained that Solana’s blocks are not clogged. He stated that the higher fees noticed by the users are not because of the network congestion but because of the competition that is present in the blockchain transactions.
Users are ready to pay more to access certain states on the blockchain, tracking high speed and exclusivity for profit-making purposes.
Yakovenko also claimed that increasing the capacity with Layer 2 (L2) solutions or Zero-Knowledge Proofs (ZKPs) would not automatically decrease fees for those who want priority. However, the current fee structure is based on users’ motivation to make transactions faster.
Solana’s price has been relatively stable and has not fallen below the $140 mark. Based on technical analysis, there is the formation of the bullish flag pattern on the daily chart meaning that there is a possibility of the uptrend continuing.
A bullish flag pattern is a continuation pattern that is usually formed to indicate further upward movement. Solana is currently in the consolidation phase of its current uptrend, and it is trading between $110 and $200 with a breakout imminent in the coming weeks.
If the price breaks above the overhead resistance at $180, Solana may climb to 24% to taste the $200 psychological level. This bullish outlook is backed by the RSI, which is recovering from the oversold region and the tightening of the Bollinger Bands, suggesting consolidation before a breakout.
However, there is still some uncertainty regarding Solana’s future price trends, and analysts' views are split. For instance, a cryptocurrency trader, Kaleo has pointed out that Solana’s price chart looks similar to Ethereum’s chart, which was right before the asset surged in late 2020.
In Kaleo's opinion, Solana may also follow a similar pattern, which, if it mirrors Ethereum’s previous bull cycle, may rise even higher targeting $1000.
However, not all analysts are very optimistic about the market. Certain technical analysis points to bearish possibilities for Solana. The head-and-shoulders pattern, for instance, suggests that the price may fall to a low of $70. This pattern along with the current situation of the market gives a negative impression for the short-term stability of Solana.
However, there is more to Solana’s market outlook than the foregoing factors, especially concerning the Solana ETF. To this date, there is no filing notification from the U.S. Securities and Exchange Commission (SEC) on the proposed Solana ETF.
This delay comes in the wake of earlier failed attempts to launch a Solana ETF as Bitcoin and Ethereum ETFs have been launched.
Moreover, the removal of critical documents from the Chicago Board Options Exchange (CBOE) website has only added to the uncertainty about the ETF’s fate. Consequently, the possibility of a Solana ETF remains uncertain as it lacks the necessary regulatory approval, which is an added factor that could contribute to the cryptocurrency’s price fluctuation.