Solana (SOL) is currently experiencing a bullish trend as positive sentiment swells around altcoins. However, analysts caution that this surge may be deceptive, indicating potential vulnerabilities across all major trading pairs. A notable shift in capital is occurring, favoring altcoins with robust fundamentals and liquidity. The question arises: will some investors overlook the anticipated altcoin season?
Analyst Warns of Possible LUNA-Like Collapse for Solana Amid Broader Market Weakness
In the past week, Solana has seen an impressive increase of over 20%, with a slight rise of 0.609% within the last 24 hours. At this moment, SOL is priced at $201.01, as the broader altcoin market sparks renewed optimism among traders. Despite this bullish activity, skepticism remains among certain investors. While some anticipate Solana could reach $300 or higher, analyst Gert van Lagen raises a red flag. He draws parallels between the current weakening of Solana’s structure across key trading pairs and the early indicators that signaled the infamous collapse of Terra’s LUNA in 2022. Van Lagen highlights concerning trends, including Solana’s high timeframe breakdowns against major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and XRP, suggesting a troubling pattern of bearish divergences that could indicate a significant downturn.
According to van Lagen, Solana’s performance against Bitcoin shows a downtrend since the 2023 rally, with SOL’s price failing to surpass the high-timeframe moving average. Similarly, when compared to Ethereum, Solana displays a weakening trend and a bearish moving average that suggests a prolonged decline. The situation mirrors that of Cardano, where Solana’s price is facing consistent rejection at key resistance levels, and the outlook against XRP continues to reveal a lack of recovery signs.
“If an asset is declining against every major competitor, it may lead to a sell-off,” he stated. This troubling perspective leads to the concern that Solana could miss the anticipated altcoin season entirely. However, not all analysts share this pessimistic outlook. Zyn, a recognized Web3 investor and influencer, views Solana’s current price movement as a “confirmed breakout,” noting that SOL has surpassed mid-range resistance levels. Zyn believes that if SOL can maintain its position above $200, it could rally to around $260.
Solana’s 20% Block Size Upgrade Aims to Enhance Throughput, Yet Reliability Issues Persist
In a development that could bolster the bullish sentiment, Solana is undergoing a substantial network upgrade as part of Epoch 821. According to the CEO of Helius Labs, this upgrade is set to increase Solana’s block size by 20%, aiming to enhance transaction throughput significantly. Once finalized, this improvement could elevate transaction capacity to over 60,000 transactions per second (TPS), utilizing the QUIC networking protocol and the blockchain’s proof-of-stake (PoS) framework. This technological advancement may strengthen Solana’s competitive edge, especially as Ethereum embarks on its scaling initiatives following the Pectra update. Nevertheless, concerns linger regarding Solana’s track record of outages and performance issues during previous spikes in demand, casting doubt on its long-term reliability.
“I’m uncertain about this,” remarked one user, reflecting the mixed sentiment surrounding the upgrade. As it stands, Solana finds itself at a crucial juncture. While proponents highlight structural breakouts, enhanced throughput, and increasing institutional interest as catalysts for future growth, skeptics warn of underlying systemic weaknesses that could pose challenges ahead.
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