The sixth-largest cryptocurrency, Solana (SOL), has experienced a significant downturn following a period of impressive growth in 2024. Starting 2025 at a price of $189.53, it quickly surged to a peak of $294.33 in late January, only to now be valued at $129.13 after a substantial drop of 32.96% over the last month. This decline in Solana’s token price and on-chain activity coincided with the launch of Official Trump (TRUMP), which exacerbated the congestion issues on Solana’s Layer 1 network, leading to transaction finalization times extending up to 16 hours.
Potential Recovery as Solana Looks to Launch Solaxy
As SOL approaches a pivotal support level around $120, it is anticipated that the upcoming launch of Solaxy (SOLX) could provide a much-needed boost. This presale initiative is designed to introduce the first Layer 2 blockchain aimed at alleviating Solana’s congestion challenges, which could rekindle investor interest and possibly propel the token towards a target of $500.
Scalability Upgrades and Market Sentiment
Solana’s recent underwhelming performance has returned its value to early 2024 levels, nearing its yearly low of $110.61, with analysts suggesting a potential further decline. According to the altcoin analyst known as Sneaky, SOL could fall to $105, which he views as an attractive buying opportunity for long-term gains. Conversely, market researcher UFO Calls predicts that the token will maintain above the $120 support level, with aspirations of it reaching $1,000 in the current cycle.
Positive Indicators Amid Market Challenges
Despite current struggles, optimism surrounding SOL is bolstered by technical indicators pointing to a possible rebound. The token’s 14-day Relative Strength Index (RSI) stands at 34.79, indicating that it is nearing oversold conditions. Furthermore, the 24-hour long/short ratio of 3.83 reveals that only 20.69% of traders are shorting SOL, signifying a prevailing confidence in its short-term growth prospects.
Shift in Market Dynamics and User Activity
Once ranked as the fifth-largest cryptocurrency, Solana has recently been overtaken by BNB (BNB) due to a combination of bearish market sentiment and persistent congestion issues affecting its mainnet. BNB, which previously had fewer than half the active users of Solana in December and January, now boasts a higher daily user count, according to data from Token Terminal. Technical analyst Kyledoops highlighted that Solana has lost 40.80% of its daily active users in the past month, which has undoubtedly impacted its token’s performance. Although traditionally not associated with Layer-2 solutions, Solana is taking steps to enhance its scalability through the upcoming Firedancer upgrade, which aims to address the congestion that has hindered its performance and user engagement.
Solaxy’s Promising Presale and Future Prospects
To combat the congestion that often results in slow or failed transactions, Solaxy’s Layer 2 solution will utilize rollups. This approach allows Solaxy to process transactions off-chain, bundling them before finalizing on Solana’s mainnet, thereby maintaining transparency and security. By alleviating the load on Solana’s mainnet, Solaxy aims to deliver quicker transactions and reduced gas fees, thereby encouraging user retention within Solana’s ecosystem. Currently, SOLX can be acquired for $0.001658 using various payment methods, including ETH, SOL, USDT, credit, and debit cards. Additionally, the presale accepts BNB payments through Best Wallet, featured prominently for its 250,000+ monthly users.
Investor Confidence and Community Engagement
With 10% of its total token supply dedicated to liquidity, Solaxy’s developers demonstrate a commitment to minimizing risks and ensuring investor security. An audit by Coinsult has affirmed the integrity of the project’s smart code, confirming the absence of critical issues. Experts from 99Bitcoins, a popular YouTube channel with over 725,000 subscribers, are optimistic about SOLX’s potential for a tenfold increase once it enters decentralized exchanges (DEXs), encouraging their audience to participate in the presale while the token price remains low. They noted Solaxy’s dedication to community engagement, highlighting its robust following of over 81,000 on X (formerly Twitter) and Telegram, along with the team’s transparency in sharing development updates, including advancements on a token launchpad for the forthcoming Solaxy ecosystem.
Conclusion: A Potential Investment Opportunity
Though the cryptocurrency market remains volatile, Solaxy appears well-positioned for a successful launch if it maintains its initial presale momentum, addressing Solana’s scalability issues. This presents an opportune moment for investors to consider adding it to their portfolios.
