- Analyst cast doubt on SOL’s $1000 price target amidst rising inflation.
- SOL dropped 22% on weekly front amidst US recession fears and Middle East tensions
Solana [SOL] has been one of the top gems of this current market bull run. It rose from a bear market depth of $8 post-FTX crisis in 2022 to a $210 peak in March 2024. That’s a whopping 26x explosive rally.
In fact, some market observers claim that the traction could tip SOL to hit $1000 by the end of the current cycle.
However, there’s a new contrarian and new perspective on SOL’s bullish prospect. According to X user and market analyst Duo Nine, SOL might have topped, and $1000 could be far-fetched amidst a high inflation rate.
‘You just bought more Solana, expecting it to reach $1,000. In total, 60 mil SOL since August 2023 or 15% inflation per year. You’re lucky if SOL breaks over $200 again.’
Source: X
Will inflation dent SOL prospects?
According to the analyst, SOL had a great run, but higher expectations on the altcoin were unwarranted because of inflation rates and weak financials.
He claimed that SOL had added 161 million SOL in the past three years alone.
Additionally, he claimed that Solana’s weak financials meant that the network was issuing more SOL to fund its operations. He cited a Bankless report that revealed Solana’s negative earnings.
‘When considering token issuance to stakers and operational costs, Solana sits at a substantial net loss of $2.53B over the past four complete quarters, completely erasing its revenue and landing it deep in the red.
Source: X
However, other users countered his view, stating that even major TradFi firms report losses in the early years of operations, and Solana is no exception.
While SOL’s current inflation is high, it’s worth noting that the network has an inflation schedule that plans to mitigate it from the current 15% annual rate to about 1.5%.
Meanwhile, SOL was down 22% in the past week amidst a weak macro front from US recession fears to Middle East tensions. It traded at $143 and eased into another key support level at $140 as of press time.
Source: SOL/USDT, TradingView
The dump triggered 149 million outflows from SOL’s spot market on the weekly charts. This reinforced a bearish sentiment that, if it persists into the new week, could make short-term price revival challenging.
Source: Coinglass
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