Prediction for the Future:
Solana made a comeback by surpassing the $100 mark on January 11th, and a surge in SOL staking indicates the potential for further growth. In December, Solana, Avalanche, and Cardano led the altcoin season rally, with each experiencing triple-digit percentage gains. However, at the start of the year, the crypto market experienced a slight decline. Between December 25th and January 7th, SOL’s price dropped by 33% from $126 to a low of $85. Since January 8th, Solana has shown signs of recovery, with a 20% bounce-back that helped it reclaim the important $100 level. The recent approval of a Bitcoin ETF has generated positive market sentiment, setting the stage for another rally in Solana’s price in the coming weeks.
What’s noteworthy is the increase in Solana staking, which mirrors the pattern observed before its historic rally in December 2023. At the beginning of the week on January 8th, around 378.6 million SOL was staked in dedicated smart contracts. However, as of January 10th, this number has risen to 398.5 million SOL. Within the last three trading days, 4.51 million SOL has been deposited into staking contracts. With SOL currently trading at $100.2 per coin, these newly-staked coins are valued at approximately $450 million.
Staking is a process where coins are deposited into smart contracts for a prolonged period in exchange for passive income. An increase in staking for a proof-of-stake network like Solana is seen as a bullish signal. It enhances the security and efficiency of the network and reduces the number of tokens available for trading, creating deflationary pressure on the market supply. Historical data shows that the previous Solana price rally to $126 in December was accompanied by a significant increase in staking. If this pattern repeats, the 4.51 million SOL staked this week could drive Solana’s price up in the near future.
Furthermore, the approval of the Bitcoin Spot ETF could lead to increased demand for altcoins, including Solana. This, combined with the reduced market supply of SOL, could trigger a breakout in its price. The bulls have set their sights on a retest of $150, considering Solana’s recent breach of the $126 mark. However, they must first overcome the initial resistance at $117. Breaking through this level could pave the way for Solana’s price to reach the ambitious target of $150.
On the downside, if the bulls fail to maintain momentum and the price drops below $85, it could invalidate the optimistic price forecast. However, there is support around the $90 level, which could prevent such a scenario.
