During the second half of March this year, Solana surpassed the price of US$200 after having shown a three-digit increase (more than 500%) in the previous 12 months.
Soon after, we saw a significant drop that made the token reach almost US$120 and, more recently, in a recovery movement we saw the breakout of US$150.00.
Despite all this severe fluctuation, it is still a crypto that has increased by more than 50% this year, considering data up to 04/22/2024:
Recently, with the completed Bitcoin halving moving the crypto market's spirits, the question remains: could this event lead Solana to surpass its ATH?
What is Solana's current ATH?
The highest price that Solana reached was US$260.00, on November 5, 2021:
Since then, the only time there has been any proximity to this ATH was precisely the moment described at the beginning of this article - and the maximum price was US$209.90:
During the huge valley seen between the ATH and the recent moment of exceeding US$200, the great crypto winter that the market went through ended up significantly dropping the price: between May 2022 and November 2023 Solana remained below US$50 (with good part of the time being below US$25).
Solana: the improvement of Bitcoin's improvement
From the moment we saw the Bitcoin halving, a major change in that token began to occur which, despite being widely known, does not raise the necessary reflections: the remuneration for mining that cryptocurrency fell by half and that makes a big difference.
For Bitcoin itself, the difference lies in what may happen to the price: the disincentive for mining tends to make this activity more restricted on the supply side and, looking at demand, an increase is expected due to the entry of spot ETFs into retail. American - not to mention the Asian demand following the authorization of these ETFs in Hong Kong.
However, looking at the crypto market as a whole, this event has the potential to bring advances to several projects, especially those with the potential to offer structural improvements to what is found in Bitcoin itself. Two of these projects are Ethereum and Solana, precisely because they are the two largest blockchain networks that have real alternative potential.
Solana ends up gaining leadership in growth potential compared to Ethereum because it is a network with greater versatility, greater capacity for transactions per second and, as it is a network that emerged precisely to optimize certain aspects of Ethereum (remember: it is known like Ethereum Killer!), developers and those responsible for resolving network failures gain an even greater incentive to correct them and allow reliability to translate into more projects and, consequently, an increase in quotations.
Psychological effect must be taken into account
There is also another factor, which is more psychological than technical: even though the crypto market allows the purchase of fractions of cryptocurrencies, people tend to believe that, with lower prices, the room for growth becomes greater.
It's similar to what happens in stock splits. Suppose a company has one million shares at R$100 per share. If you want to split these shares in a 5:1 ratio, it would make five million shares available at R$20 per share. In practice, the total value of the shares available remains the same, but the verification of a lower price tends to, psychologically, serve as an incentive for purchases - because people see in this a potential for new highs so that at least the price reaches the target. previous value.
The analogy with stock splits is valid not because the price has gone through that, but rather in the comparison between the price of Ethereum (which is over US$3,000) and what happens in Solana (as already mentioned, just above US$3,000) $150).
Still looking at the psychological aspect, there is the point of considering that percentage growth tends to stabilize after strong increases, but this is more common at higher prices. Someone is more likely to agree with the statement “there's no way this price can go up” on something in the thousands of dollars than something in the hundreds.
Again: psychological effect, but not to be ignored.
Taking all these aspects into account, we can expect Solana's ATH to be surpassed in this next cycle that involves the recent halving period and the next one (expected for 2028). And do you agree with this thesis?
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