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▲ Solana (SOL) ©
Solana (SOL), backed by overwhelming on-chain data growth and the positive news of a major upgrade, is currently stuck in a long-term trading range, hindered by heavy technical resistance, undergoing a condensation process for a massive explosion.
According to the investment media outlet TradingNews on May 21 (local time), the price of SOL remains in the range of $86 to $87.78 on major exchanges, continuing its long-term correction. The current price has plummeted by approximately 71% from its all-time high of $294 recorded in January 2025, and after peaking at $146 earlier this year, it experienced extreme volatility, dropping to $68 at one point in April. Virtual asset experts diagnosed that for SOL to reach its long-term target of $200, a surge rally of as much as 135% must precede it, but breaking the strong psychological and structural resistance wall of $100, which has brutally crushed all rebound attempts over the past two months, is the top priority.
In contrast to the stagnant price indicators, Solana's intrinsic network fundamentals are showing paradoxical growth, stronger than ever. Solana has expanded its ecosystem by achieving 3.2 million daily active wallets, $10 billion in total value locked (TVL) in decentralized finance (DeFi), and $2.39 billion in app revenue by 2025. In particular, the adoption rate of the new validator client Firedancer, introduced to the mainnet in December last year, has exceeded 20%, and if it surpasses the future target of 50%, it is expected to completely solve the network's chronic reliability issues, accelerating institutional capital inflows such as Morgan Stanley's spot ETF application or JPMorgan's commercial paper issuance. Furthermore, the Solana spot ETF capital inflow channel, which currently holds $1.1 billion in net assets, remains robust.
The most powerful short-term catalyst to resolve this discrepancy between fundamentals and price is the 'Alpenglow' mainnet upgrade, scheduled for release in Q3 this year. Alpenglow, which entered the community test cluster on May 11, completely innovates the existing consensus algorithm structure, aiming for an 85-fold performance improvement by reducing the transaction finalization time from the previous 12.8 seconds to just 150 milliseconds (ms). If this upgrade successfully settles, Solana will be reborn as the fastest Layer 1 blockchain capable of processing large-scale institutional financial settlements, which could be an opportunity for a massive asset revaluation (rerating) similar to the past Ethereum Merge event.
However, caution is needed as technical indicators and the macroeconomic environment still suggest a dominant short-term downward pressure. The daily Relative Strength Index (RSI) remains at 45.76, below the neutral zone of 50, and the Average Directional Index (ADX), which indicates trend strength, is also at 11.55, representing extreme trend weakening and sideways trading within a range. The current price is significantly below the 200-day Simple Moving Average (SMA) of $108.79, indicating that the long-term trend remains bearish. Externally, the US 10-year Treasury yield remains high at around 4.6%, the probability of an additional Fed rate hike has surged to 62%, and the macro shackles, with the leading cryptocurrency Bitcoin failing to decisively break the $90,000 mark, are heavily weighing on SOL's upside.
Consequently, Solana faces a stark dichotomous fate at the crossroads of fundamental triumph and macroeconomic downturn. If the upcoming Alpenglow upgrade proceeds without a hitch and, accompanied by trading volume, decisively breaks the $100 barrier based on the daily closing price, an asymmetrical profit zone could open up, leading to a short-term surge to $111, then $127, and finally to the $150 supply zone. However, if a critical bug is discovered during the testing process and the primary support level of $82 breaks, there is also a possibility that capital outflow to rapidly emerging Layer 1 competitors such as Sui (SUI) or Hyperliquid (HYPE) will accelerate, potentially reverting to the April low of $68.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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