What to know:
- Solana recorded 170.3% average year-over-year trading volume growth during April, May, and June.
- Elliott Wave analysis suggests SOL could enter a fifth bullish wave if key support levels hold.
- Three proposed Solana upgrades aim to reduce inflation, increase staking, and significantly raise token burns.
Solana is gaining momentum across both the market and its underlying network. Although the trade volume has increased exponentially more than other blockchains, there have been new protocols proposed that may affect the way the coin will be distributed, which will ultimately affect the basic fundamentals of the cryptocurrency in the long term.
Trading volumes at Solana have experienced an increase of around 170.3% year over year in April, May, and June, as highlighted by expert Zensei. The growth witnessed is almost 19x more than the 9.1% growth experienced by Hyperliquid over the same period.
Source: X
Technical Outlook Keeps Long-Term Bullish Structure Intact
According to analyst Vuori Trading, SOL has started to recover from its previous fall and might have embarked on its fifth Elliott wave. If the general crypto market stays bullish, Solana can reach $1,259. The current dip is regarded as a fourth wave correction and not a reversal of trends.
Source: X
The major Fibonacci levels continue to provide valuable trading guidance. The critical support at the level of $107.94 remains intact, while the prior high at the level of $270 appears to be the nearest major resistance.
A breakout of the latter one will increase the likelihood of further upside growth, while breaking the former one will increase the probability of a deeper correction. At the same time, the RSI is approaching the levels where major bearish phases ended before.
Protocol Upgrades Could Change SOL’s Supply Dynamics
Other than the technical specifics, the suggested protocol updates from Solana could affect the way the token works in the future. According to DeFi Dev Corp, the network is currently minting around 60,000 new SOLs on a daily basis but burning only 650 of those.
The three SIMD proposals seek to reduce this number gap. SIMD-550 will work to increase the rate of decrease in the inflation of Solana, thus reducing the future issuance of tokens. SIMD-123 will increase institutional staking by means of validator pools, thus reducing the number of SOLs in circulation.
Source: X
Next Catalysts for Solana
If the proposals are accepted, it will lead to reduced levels of inflation, increased staking engagement, and burning of additional tokens as the level of network activity increases.
The most important elements that traders should look out for include the decisions made by the governance regarding these proposals, the ability of Solana to keep pace with the increased levels of network activity, and the price action above $270.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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