Solana Price Decline and Market Outlook

Solana (SOL) has plunged over 35% in the past month, falling to $127.63 at press time, marking its lowest level in months. This sharp decline has sparked wider market panic, influenced by weak technical indicators and fading network activity.

Investor Sentiment

As Solana attempts to regain momentum, investors are questioning whether the altcoin can recover or if further decline is inevitable.

AI Predictions for Solana’s Price by March 31

Finbold’s AI-driven prediction tool has provided insights into Solana’s price trajectory, projecting an average SOL price of $133.83 by March 31, 2025. This forecast indicates a possible 7.59% increase if achieved.

• Bullish Forecast: Claude 3.5 Sonnet predicts a 13.76% increase, placing SOL at $141.50 by month-end.
• Conservative Predictions: Gemini 1.5 Flash 002 and GPT-4o expect SOL to reach $130.00, a 4.51% rise, reflecting a tempered bullish sentiment influenced by market conditions.

Solana’s Network Fundamentals

Despite AI optimism, Solana’s network fundamentals are struggling, as weekly revenue has collapsed from $55 million in January to $4 million recently, indicating a 93% drop. Additionally, the total value locked (TVL) in Solana’s DeFi ecosystem has nearly halved, from $12 billion in January to approximately $6.4 billion on March 11.

However, there are signs of renewed bullish momentum in Solana’s derivatives market:
– Trading Volume: Increased by 8.49% to $12.95 billion.
– Open Interest: Climbed 3.36% to $3.74 billion.
– Options Open Interest: Up 3.49% to $8.62 million.

Long/short ratios on Binance and OKX exceed 3.7, showing traders’ strong long positions. Short liquidations have also outpaced long liquidations, indicating the potential for a short squeeze that could raise SOL’s price.

If momentum continues, SOL could break out toward $350 to $400 in the mid-term, replicating its historic 2021 rally.

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