Solana (SOL) posted a slim recovery after Trump’s sweeping tariffs on China, which liquidated the crypto market. SOL, aka ‘Ethereum Killer’, has now got back above $200 since last Friday’s crash. However, there’s one question that hangs in the air: will Solana reach $300 by the end of the year?
On Friday, Solana crashed to $167, after the U.S president imposed a 100% tariff on China on top of the already 30%. With the announcement of the tariffs, around $20 billion was wiped off the market. With last week’s crash, where $1.73 billion in SOL was wiped off, traders are still hesitant to take any risky bets. The Solana perpetual funding rate is hovering close to zero, indicating that there is no clear direction in the price movement.
Trader shy away from risky bets
Since perpetual contracts have no expiry date, when there are more long positions, the funding rate goes into the positive region, and with more short positions, it goes into the negative region. This mechanism makes sure that the market is not lopsided and that the future market prices align with the spot prices.
In addition, the Solana network activity has also drastically dropped. The app fees, which are the fees that Dapps on Solana pay to the network, along with the chain fee reduced drastically over the last few months. The app fees dropped from $488 million to $219 million over the last three months, while the chain fees took a bigger hit. The chain fees or gas fee, which is paid to the Solana network, crashed from $42 million to $13.7 million during the last three months.
Solana price prediction: Is $300 on the SOL cards?
On the technical front, Solana is trading inside a bull flag, rebounding off the upper and lower trendlines. Since the bull flag is not fully formed, it is very difficult to adjudicate whether SOL will hit $300.
However, when taking a closer look, SOL is currently trying to test the resistance level at the 50-day Moving Average (MA) at $210, which the bulls will secure for sure, as SOL follows the zig-zag trajectory as shown above. After the bulls demolish the $210 level, the next resistance will be at $222, where the upper trendline crosses. This pattern of rebounding of the upper and lower trendline will continue until the bull flag is fully formed, and then by December, there will be a breakout, and SOL will push past $300.
And don’t forget that there is supposed to be an interest rate cut for December. With the interest rate cut, there will be more supply of money and investors will be more likely to invest in risky assets.
