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Publication date: March 13, 2025
Solana has been under considerable pressure in recent weeks. The overall cryptomarket has been under pressure for some time at the beginning of this year, however, Solana seemed to suffer a little less. Indeed, in early 2025, Solana still managed to hit record highs.
With recent policy developments, institutional interest, and significant price movements, Solana (SOL) remains one of the most talked-about Layer-1 blockchains. But as the market swings between optimism and volatility, the question arises: What will Solana face in the coming months?
On May 16, 2024, we already wrote a comprehensive analysis on Solana's technology and market position. Our full analysis from that time can be read here: Solana, May 16, 2024.
What is Solana?
Solana is a Layer-1 blockchain that was founded in 2017 by Anatoly Yakovenko and has since become one of the largest cryptocurrencies with a market capitalization of over $63 billion.
What sets Solana apart is its exceptional speed and low transaction costs. Thanks to its innovative Proof-of-History (PoH) consensus mechanism, Solana can process thousands of transactions per second (TPS), making it a scalable and efficient alternative to Ethereum and other competitors.
This speed and cost efficiency have made Solana particularly popular within the blockchain world. The network is widely used for decentralized applications (dApps), DeFi protocols and NFT marketplaces, so adoption continues to grow both within the crypto community and beyond.
Recent developments
Solana has been in the spotlight in recent weeks, in part due to sharp price fluctuations. Below is a summary of the most impactful events:
1. Trump's crypto reserve announcement: On March 2, 2025, President Donald Trump announced that the U.S. will establish a strategic crypto reserve. In addition to Bitcoin and Ethereum, this included altcoins such as XRP, Solana and Cardano. This news led to an immediate 13% increase in Solana's price to $159.75. This policy change is seen as a recognition of the role of cryptocurrencies in the U.S. economy and positively affected market sentiment.
2. Franklin Templeton files Solana ETF application: On Feb. 21, 2025, Franklin Templeton filed an application for an exchange-traded fund (ETF) that tracks Solana's spot price. This highlights the growing interest of institutional investors in Solana and could be a catalyst for further price growth. A Solana ETF would lower the threshold for large investors and increase liquidity in the market, generally leading to more stable pricing.
3. Network performance and disruptions: Despite the positive institutional news, Solana continues to face challenges. On March 5, 2025, the network encountered severe congestion issues, delaying transactions and causing some users to experience problems executing swaps and NFT minting. Although Solana's developers are actively working on scalability solutions, network stability remains a concern for investors and users.
Share price development of Solana:
As mentioned earlier, Solana has experienced significant share price fluctuations recently. After rising in November, caused in part by the U.S. presidential election, the share price consolidated between $180 and $220. In early January, however, Solana received a bullish boost from positive developments in the market, including the announcement of the U.S. crypto reserve and Franklin Templeton's ETF application. This led Solana to reach its highest price in years at $294.33.
Yet the upward trend could not last and Solana, like the broader crypto market, followed a correction. The price has since experienced a sharp decline and has now more than halved since its recent high. Currently, Solana is hovering around $127, having previously peaked at $180, due to Trump's crypto reserve choice. This highlights the volatility of the market and that Solana in particular is currently experiencing very large swings.
Many analysts expect that if the ETF is approved and Solana effectively addresses its network issues, a breakout above $175 is possible in the coming months. At the same time, there remains a risk of further corrections if the broader crypto market shows weakness.
The chart below shows Solana's price movement, showing a crucial support area around $112 (blue line) that has been holding since March 2024. The coming period will reveal whether this zone again acts as a bottom and Solana can recover on it. If the price stabilizes and a clear bottom formation becomes visible, this could be an attractive entry point for investors.
What could drive up the price of Solana?
1 . Regulatory acceptance: Inclusion in the U.S. strategic crypto reserve strengthens confidence in Solana, which may help accelerate institutional adoption.
2.ETF adoption: A spot Solana ETF could attract new capital flows and further support the price.
3. Technological advances: Scalability solutions and improved network performance can increase confidence in Solana.
4. Adoption in DeFi and NFTs: Solana remains a major player in these sectors, which may continue to drive demand for SOL.
What could work against Solana?
1. Network outages and technical problems: Solana has had network outages in the past, which can affect trust.
2. Competition from layer-1 blockchains: Ethereum, Aptos and Sui remain strong alternatives for dApp developers.
3. Macro economic factors: Global economic uncertainty and regulation may put pressure on the broader crypto market.
4. Market volatility: As seen recently, Solana's share price remains susceptible to large price fluctuations, especially depending on Bitcoin.
Conclusion
Solana remains one of the most volatile and much-discussed Layer-1 blockchains in the crypto world. The past few months have shown how quickly sentiment around Solana can change, with institutional adoption and positive regulation on the one hand and ongoing technical issues and market volatility on the other.
The inclusion in the U.S. crypto reserve and the possible adoption of a Solana ETF could be a strong catalyst for further growth. These developments could increase institutional demand and contribute to more stable pricing. At the same time, network failures and competition from other blockchains remain long-term risks.
In the short term, the market will primarily look at Solana's technological advances and how well the network is able to solve scalability problems. If Solana succeeds in improving its network performance and attracting institutional investment, a breakout above $175 may be possible within a few months. Still, caution remains necessary, as macroeconomic factors and market volatility can strongly influence the stock price.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
