As 2022 gets underway, Solana is falling to multi-month lows, showing a near-halving of value since its record peak in November 2021. Recent high volatility in Solana suggests traders and speculators will see money to be made in guessing the cryptocurrency's swings correctly. Read on to get my forecast of what Solana is likely to do in 2022.
Downturn Approaching 50% Loss of Value
SOL/USD was trading near a value of $260 on the 6th of November 2021. By early January 2022, SOL/USD was hovering over important technical support. The price of Solana then was near the $140 level, which is slightly less than a 50% loss of value in a bit more than 2 months. This fact should make all speculators pause and reflect on the potential of SOL/USD volatility, and what this can do to their trading accounts if they get involved here. The volatility of Solana and all cryptocurrencies must be respected by any successful speculator before any money can be made safely.
SOL/USD is hovering near price levels it last traded at in October of 2021. The broad cryptocurrency market is suffering a downward trend and the selling pressure experienced by Solana has also been experienced by its major counterpart Ethereum. SOL/USD is not alone in its bearish trend as 2022 begins. The question that must be asked by traders who believe in the long-term viability of Solana as a blockchain entity - or at least as a speculative asset to place bullish trades on looking for upside - is whether and when SOL/USD will see upside momentum reignite?
On the 9th of August 2021, SOL/USD was trading at what now seems still like a distant value of only $39. In the middle of July 2021, SOL/USD was trading just above $20. The amount of value Solana was able to add in the last half of 2021 was outstanding for those bullish speculators who managed to ride the train higher. The apex values of early November 2021 are certainly gone, but it is not entirely clear if the face the price was able to trade above $240 in the first week of that month was just overexuberance or a positive sign of things to come.
SOL/USD lost almost fifty percent of its value over the final two months of 2021, but another loss of 50% value in the next two months would put the value near about $70, which would be a price last seen in the third week of August 2021. The potential for additional selloffs and erosion to these lower levels may have seemed farfetched a month ago, but if nervous conditions grow in strength, a further dramatic drop from SOL/USD cannot be ruled out.
Nervous Sentiment and Potential Selling Theory
Speculative forces were certainly able to find a strong army of backers with SOL/USD starting in February of 2021. The value of the cryptocurrency around the first week of February 2021 was near $8 per coin. However, from early February until mid-May 2021, like the broad cryptocurrency sector, SOL/USD was able to enjoy a road upwards and the high reached nearly $58.
When the broad cryptocurrency market suffered a downturn in May 2021 as over exuberance faltered, SOL/USD, like its major counterparts, declined in value. The lows of July 2021 in SOL/USD correlated to lows in other cryptocurrencies well.
One of the most interesting theories regarding the rise of cryptocurrency prices in 2021 is the idea that the massive economic stimulus bills in the U.S. over that year played a part in the rise of cryptocurrency values. The theory is that Americans who were receiving stimulus checks from the U.S. government invested some of the money given to them within the cryptocurrency market looking for speculative gains in these assets.
SOL/USD 1-Year Price Chart
As strange as it might sound, the prospect that the U.S. government is not going to issue further stimulus packages to U.S. citizens and that it may be a cause for the speculative fever in crypto to have lost steam over two months is intriguing.
Solana Still Shines Brightly as a Major Cryptocurrency
Solana is still viewed as a major and up and coming rival to Ethereum, because of the speed of the Solana blockchain and its ability to create smart contracts. The two-month bearish trend within SOL/USD is certainly testing the optimism of its influencers and proponents, but the Solana ‘ship’ still has passengers willing to ride its vessel into waters, who believe it can operate safely.
Current support should certainly be monitored carefully by SOL/USD traders and if the $130 level is not able to hold, the next obvious support levels at $125 and $120 should be watched. Moves of over 5% and 10% are still a part of daily life for SOL/USD.
Traders with short-term goals compared to investors with long-term ambitions in SOL/USD have two different realities which are likely not shared. Short-term traders who are nervous about the bearish trend which has been dominant in SOL/USD certainly need to watch current activities and decide where the potential to gain profits can be found. Selling SOL/USD into the existing bearish trend short term may prove a reasonable wager. Long-term investors may be looking to buy Solana and HODL (hold on for dear life).
Solana’s Speculative Trends and Reversals Considered
As 2022 progresses, SOL/USD could find a price equilibrium and begin to show some type of bullish activity. If and when the nervous conditions disappear again within the broad cryptocurrency sector, Solana is likely to take its place in the sun and find that its influencers and proponents are still active. Having last tested the $200 mark in late December of 2021, bullish speculators will note that Solana is capable of rebounding very quickly if it can fall very quickly.
Solana 3-Month Trend Price Chart
Resistance levels and trading volumes will certainly need to show a taste for more upside action within the broad cryptocurrency market for SOL/USD to partake in a serious bullish reversal and trend. If SOL/USD can muster upwards trajectory and begin to sustain prices above $150 level and then quickly challenge $160, the $175 mark would then become important. Short-term traders need to carefully consider their capability to stay in trades for moves which may take time, and they should also understand the costs of overnight transactions while pursuing their targets.
Bottom Line: SOL/USD Outlook for 2022
The speculative price range for SOL/USD in 2022 is between $52 and $275.
SOL/USD went from $8 in February 2021 to an all-time high of approximately $260 by the first week of November 2021. The ability of Solana to climb from such lows to such a high value cannot be overemphasized. It also highlights the magnitude and potential of overexuberance having been a main ingredient of that huge rise in value. As SOL/USD challenges important support levels and the broader cryptocurrency market remains nervous, traders should not be overly ambitious with their short-term targets and make sure they trade with solid risk management.
If the downturn in SOL/USD continues and the price breaks down below the $125 level, this could prove to be a dangerous signal heralding a deeper selloff. Psychological price levels in cryptocurrencies – including SOL/USD – are very real. While institutional traders may have an impact on cryptocurrencies like Solana, retail traders who are buying or selling SOL/USD via their chosen exchanges and crypto wallets still have a major influence on price. If SOL/USD finds itself confronted by stronger headwinds, Solana could easily fall below $100 over the course of 2022.
The all-time high of SOL/USD was not long ago, and positive sentiment within the cryptocurrency landscape can certainly spring forth very quickly out of seemingly nowhere, which might then produce higher pushes and a new record value emerge in 2022.
How much will Solana be worth in 2025?
Such a long-term forecast is impossible to make precisely, but Solana’s smart contracts facility can certainly make it a real competitor to Ethereum.
What is the future of Solana coin?
Solana coin probably has a bright future as one of the top six cryptocurrencies by market capitalization, and due to its smart contract facility.
How high can Solana go?
I see Solana’s maximum potential value in 2022 as $275 per coin.