Solana: Holding The Correction Of Growing Platform

Summary Solana`s advancements in scalability, security, and developer growth make it a strong long-term hold, despite potential short-term corrections. Key developments include the Firedancer validator client, quantum-resistant security features, and significant institutional investments, boosting Solana`s ecosystem and financial health. On-chain data shows a 232% increase in TVL and a strong rise in network transfers, indicating growing trust and usage of Solana. Technical analysis suggests Solana may face short-term corrections, but $180 is a crucial support level, presenting potential buying opportunities. It is well known that Solana USD (SOL-USD) is among the best-performing tokens of the past year with its platform developments. In this article, I explain in detail why I think it is appropriate to hold Solana, which has been constantly reaching new heights with excellent developments in the long term. First, let`s learn what Solana does. The purpose of Solana`s design among other traditional cryptocurrencies (aka. Bitcoin) was to overcome the scalability problems that many blockchains face these days. Solana created an open-source framework that lets users have extremely high-performance transactions. In addition to that Solana processes up to 65,000 transactions per second with minimal fees and certainty by utilizing a Proof of History (PoH) consensus mechanism together with Proof of Stake (PoS). Solana is the largest advocate for NFTs and several meme coins. For developers who also wish to construct high-performance dApps, it`s a pretty decent answer. Solana`s Roadmap As we enter 2025 Solana`s roadmap and progress focused on scalability as I told in the last paragraph. I would like to explain in detail every aspect from ecosystem growth to technical upgrades. At the beginning of 2024, Solana introduced token extensions . Through these token extensions, Solana aims to increase the flexibility of token creation on the platform. Solana is actually trying to allow developers to design more complex and versatile token economies on the Solana platform. That gives a bit of breathing room for developers who are in DeFi space, actually. That was a development but not the biggest. The biggest one is Firedancer! In 2024 Solana announced its Firedancer application . It`s a high-performance validator client for the platform. Solana is aiming to optimize transaction speeds and improve the scalability of the platform with this application in 2025. So it is evident that the advancements in Solana`s roadmap are ongoing and that 2025 is approaching gradually in a comprehensive and well-planned way. We definitely will hear the name Firedancer a lot this year. On the security side, Solana was developing things too. Solana announced the Winternitz Vault which is a quantum-resistant feature. I think that this security system will be a relief for Solana investors and developers in the cryptocurrency sector where hacking attacks are really common. The Solana ecosystem is still doing incredibly well financially. By obtaining $173 million in funding in the third quarter of 2024, Solana witnessed a rebound in investor confidence. In September alone Solana raised $103 million. This number is the highest quarterly financing since Q2 2022. This funding increase gives very positive signals about Solana`s sustainability. Indeed, a lot of money has been invested in Solana, but developers are also selecting the platform. Solana was the most popular platform among new developers in 2024 and the number of platform developers rose by 83% annually. This is the first time since 2016 that an ecosystem has surpassed Ethereum in terms of new developers. This developer growth in Solana is extremely positive news for the development of the ecosystem. If Solana can keep more than 50% of its developers on the platform as it did in 2023, I think we will see incredible developments on the Solana platform in 2025. Number of Active Addresses on the Solana Network (theblock.co) The active address ratio for the Solana network was about $330,000 at the beginning of 2024. But now that number has increased by 1200% to 4.29 million. Since the start of 2024, Ethereum`s active addresses have grown by 2.65% to 464,000, and therefore I can say that Solana has made great strides. Network prices have increased by 13% due to increased network usage. Partnership and Investors Major institutions, investors, and developers are all still interested in the Solana ecosystem. Significant institutional adoption of Solana is indicated by the interest shown in the platform by major investors like Franklin Templeton , which oversees assets worth over $1 trillion. Canadian conglomerate Sol Strategies made a big investment in Solana too. The company has allocated a $25 million unsecured loan to purchase Solana tokens alone. They have already drawn down $4 million and plan to use the rest for large-scale SOL purchases. I`m sure that is going to give Solana pretty good liquidity. On top of that, it is clear that businesses are feeling pretty optimistic about Solana`s future. On-Chain Analysis of Solana Solana Total Value Locked (defillama.com) If we`re talking about on-chain we definitely need to talk about total value locked since it`s one of the most fundamental on-chain data for a token. From beginning of the 2024 Solana`s TVL has increased by 232% to 43.26 million. This increase shows us how much people trust the Solana ecosystem and lock their Solana. Not only that but also network`s overall health is steadily getting better. Because Solana`s financial operations are getting easier as TVL expands. Let`s compare Solana`s TVL with its competitors so we can analyze it better. Solana`s TVL looks really positive in that it is the 3rd token with the highest TVL increase year over year. Crypto TVL (Token) YoY Change TVL (Price) YoY Change Bitcoin 67,340.00 845.78% $6,399,000,000.00 1937.00% Aptos 112,260,000.00 800.96% $1,051,000,000.00 864.22% Solana 43,260,000.00 232.00% $9,447,000,000.00 600.00% Ethereum 19,500,000.00 47.16% $64,824,000,000.00 108.77% Sui 379,560,000.00 38.53% $1,856,000,000.00 685.60% Tron 28,573,000,000.00 -62.91% $7,152,000,000.00 -16.44% Network transfers will be the second kind of on-chain data I examine. The growth in Solana`s network transfers is paralleling that of TVL. Transfers in 2024 were less than $5 billion in the first half of the year, but they topped $5 billion in the second half and over $10 billion in the last month. When we consider that transfers have reached 2 billion in nine days this month, we can confidently predict that transactions will increase from year to year. Transactions on the Solana Network (theblock.co) Technical Analysis I`m going to start the technical analysis with the market share that Solana takes from the altcoin`s total market value. Solana`s share in the market value of altcoins (including Ethereum) increased to 9.69% in the sharp bull run that started at the end of 2023. However, since the correction began Solana has seen the 6.76% level like at the end of 2023. Currently, Solana holds 6.82% of the market value of altcoins with a 29.74% increase year-on-year. This decline, which has occurred since November 2024, has the potential to continue at least to the 5-5.9% range. I would like to draw your attention to the fact that this does not directly mean that Solana`s price will decline. This can happen in 3 scenarios. Solana`s price may remain the same and the prices of other altcoins may increase. The price of Solana may increase, but the prices of other altcoins can increase much more than Solana or the price of Solana may fall while the prices of other altcoins remain the same. TradingView.com (TradingView.com) Therefore, I do not expect Solana to be the best-performing token in the altcoin market in the short term. It is likely to enter a stagnant atmosphere and be suppressed because it is in a clear correction. In order to better understand this correction, I first compare Solana to Bitcoin. TradingView.com (TradingView.com) In the bull run in late 2023, Solana gained significant value against Bitcoin and has been wandering in a channel since early 2024. The fact that the Solana/Bitcoin ratio is in a channel means that the price movements of both cryptocurrencies are very close to each other. Considering that the average price of Solana since 2021 is 0.0020 Bitcoin, Solana is currently in the average and there is potential for divergence. Since I told altcoins share in the market value is decreasing I think that there is a good possibility that altcoins may lose value against Bitcoin in the short term too. TradingView.com (TradingView.com) When I look at Solana`s price chart on a weekly timeframe I see that it has been constantly above the Hodrick-Prescott filter, especially since the end of 2023. Since its launch, the HP filter seems to decide whether Solana will be bearish or bullish. For an example of this, we can look at Solana`s weekly close below the HP filter at the beginning of 2022. Therefore, Solana currently has two options: either it will see $180 as a support level and continue to rise, or it will fall to $120, creating a bear market risk. TradingView.com (TradingView.com) My own DCA indicator has started to show oversold at the moment, but the fact that there is still some space increases the likelihood of the scenario at the beginning of 2022. I don`t think we will enter a bear market immediately, but a decline to $120 will delay Solana`s new run. It would be a development that would make me happy, and I would have the opportunity to put more Solana in my pocket. When I look at Solana in the daily time frame, I see an upward trend that has been going on since September 2024. The support point of this trend is again $180. Therefore, $180 is determined as an important support point in the short term. Risks and Challenges Since it is the most preferred platform for meme coins, a meme coin that will be launched in the Solana ecosystem and become a trend out of nowhere could seriously increase the demand for Solana and significantly increase its short-term price contrary to my expectations. Since the cryptocurrency market is a very new market compared to traditional financial markets and is constantly being adopted by governments and institutions, a Solana ETF approval that comes unexpectedly could unexpectedly increase the price. Conclusion On-chain data shows that Solana is one of the most successful tokens among cryptocurrencies. Its developments and partnerships are incredibly positive and draw a positive image looking forward. Therefore, I think that Solana is an excellent cryptocurrency in the long term. Since I see a high potential for Solana`s correction in technical terms, I think there will be some more buying opportunities for Solana. Therefore, my position for Solana in the short term is "Hold".

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