- Venture capitals continue to inflate supply of SOL.
Solana’s weak financial statement raises questions on SOL’s long-term dynamics.
As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous cycles and trends that ultimately determined the fate of various assets. Based on my analysis of Solana (SOL), it seems that this cryptocurrency may not break its all-time high of $260 any time soon.
It’s possible that Solana (SOL) may not surpass its record peak of $260, achieved in November 2021. Some investors are hesitant to buy more SOL due to concerns about potential losses, as venture capitalists continue to increase the token supply by minting new ones.
At the all-time high (ATH) of SOL, the total number of circulating coins was approximately 301 million. However, in the subsequent three years, an additional 161 million tokens have entered circulation.
Since August 2023, 60 million SOL have been added, resulting in a 15% annual inflation rate.
Based on Messari’s data showing a five-year low in trading volume, there’s a strong possibility that the price of Solana may decline, consistent with past findings from AMBCrypto research.
Negative earnings plunge Solana deep into the red
Furthermore, as per remarks by market analyst Duo Nine regarding the platform previously known as Twitter, Solana has experienced a total loss of approximately $2.53 billion in the last four quarters, according to Bankless data. This loss has wiped out its earnings and sent it into a financial downturn.
This financial strain emphasizes on the unsustainable nature of Solana’s current economic model.
Duo Nine suggested that SOL may never break its all-time high due to a high inflation rate.
Investments in Solana are becoming progressively more uncertain, given the accumulating losses and inflationary strains that might threaten its lasting success and market standing.
SOL price after global M2 money supply hit ATH suggests bearish sentiment
As a seasoned economist with years of experience studying global financial trends, I have witnessed countless fluctuations in the money supply throughout my career. However, the current surge in the M2 money supply to record highs is unlike anything I’ve seen before. It feels like a torrential downpour flooding the economy with cash, and it’s left me wondering what the long-term implications could be for consumers, businesses, and the overall health of the global economy. The TradingView chart doesn’t lie – the money supply is at an all-time high, and I can only speculate on how this deluge of liquidity will affect us all in the days, weeks, and months to come.
This increased liquidity generally boosts crypto prices as the value of money drops.
Regardless of the ongoing surge, Solana (SOL) failed to reach fresh record highs similar to Bitcoin (BTC), which indicates a possible steep drop in its market value.
As Bitcoin prospered with the influx of funds, Solana’s relatively stagnant growth suggests potential issues or market factors that might restrict its expansion more than other digital currencies, implying a less favorable outlook for Solana compared to Bitcoin.
All-time BTC v SOL chart comparison
As an analyst, I find that the data presented offers clear, impartial perspectives, suggesting that Solana may have reached its peak within this particular cycle, a point that seems to be overlooked by some.
As a crypto investor, I observed that Bitcoin reached a brand-new record high, which was an exciting development. However, contrary to what the Walletinvestor.com comparison chart suggested, Solana didn’t manage to surpass its previous pinnacle.
This difference highlights Solana’s struggles despite the market’s overall bullish trend.
Realistic or not, here’s SOL’s market cap in BTC’s terms
Bitcoin’s ascent underscores its commanding position, whereas Solana’s inability to scale new peaks implies hidden problems or reduced interest.
Pay attention to the charts, because Solana’s recent track record suggests that its growth might not mirror Bitcoin’s during this particular market cycle.
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2024-08-06 01:11