Solana, the layer-1 cryptocurrency, has been trading sideways for over 7-months. This prolonged consolidation during the typically bullish fourth quarter signals potential weakness among SOL buyers and raises concerns about a possible renewed correction. Will the anticipated fall push the Solana price to the $50 level?
What to Expect If Solana Price Drops to $50 in 2024
By press time, the SOL price had traded at $155, with an intraday gain of 0.34%. While Solana currently holds a solid position in the market, a drop to $50 would represent a nearly 70% decline from its current price.
Assuming the circulating supply remains the same, the aforementioned price correction could plunge Solana’s market cap to $23.6 billion, losing its position in the top 10 cryptocurrencies.
However, Solana currently maintains a strong position in the crypto market, and the following factors could lead to such a significant decline.
Global Market Meltdown: A severe recession or financial crisis in the global market, similar to the COVID-19 pandemic, could drive a major correction for all crypto assets, including Solana.
Massive Liquidations: A notable revenue for the SOL network comes from its meme coins. As these assets are volatile in nature, they might experience liquidity crunches in fearful markets, also impacting the SOL coin.
Geopolitical Uncertainty: The current Israel-Iran war has significantly stalled the recovery momentum in the crypto market despite the October bullish sentiment. If the geopolitical issue escalates, the panic selling could drive a prolonged correction in the market.
Will SOL Drop to $50?
Solana’s network has proven itself a serious competitor to Ethereum due to its ability to handle a higher volume of transactions at a fraction of the cost. After a severe setback from the FTX collapse, several analysts believe SOL is undervalued and is better positioned for recovery.
The Solana price prediction in the daily chart shows the consolidation of the last seven months as a bullish pennant pattern. Theoretically, this pattern is known to recuperate the bullish temporary consolidation before a decisive breakout.
The pattern offers solid support at the $120 level that could prevent the asset from dropping below $50.
SOL/USDT -1d Chart
Why SOL Price Won’t Drop to $50
According to DeFiLlama, the SOL total volume locked (TVL) has witnessed a sharp reversal from $3.8 Billion to $5.95 Billion — a 56% increase — in the last 11 weeks. The rising TVL indicates the investor’s growing investors’ confidence as they pour more capital into the network’s DeFi protocols.
Moreover, theblock data show that the number of addresses in the Solana blockchain has surged from 3 million to 4.89 million, accounting for 63% of the growth within a fortnight. This rapid increase implies heightened adoption and activity on the network, signaling strong user interest and engagement.
Conclusion:
In the absence of a black swan event like a global recession, war, or severe liquidity crisis, the Solana price drop to $50 remains unlikely. The network’s robust ecosystem and market performance signal a bullish future for SOL rather than a sharp correction.
The post Here’s What Happens If Solana Price Falls to $50 in 2024? appeared first on CoinGape.