$520 from Solana? Investment company drops forecasts for Bombshell Sol

Vaneck, a global investment management company with a strong reputation in Exchange-Traded Funds (ETF) arenas with nearly 70 years of history, has issued an impressive price target for Solana (SOL). In a post shared on X on January 6th, the New York-based company predicted that by the end of 2025 Solana would skyrocket the value of its Solana to $520.

Vaneck predicts Solana $520 by the end of 2025

Vanek’s paper focuses on Solana’s share within the Smart Contract Platform (SCP) market and the historical correlation between crypto market capitalization and US growth. M2 money supply. According to the company:

“The Solana price target by the end of 2025 is $520. We value Solana (SOL) based on our forecast year-end market share within the Smart Contract Platform (SCP) market. SCP’s market forecast is , given its strong historical correlation with crypto market capitalization, it is derived from the growth of the US M2 money supply.”

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Vaneck’s analysis predicts that M2 (a measure of US money supply that accounts for cash and easily convertible US money supply near deposits) will reach $22.3 trillion by the second half of 2025. October 2023. Vaneck estimates, citing regression analysis.

“We expect to reach 22.3T M2 by the end of 2025, maintaining an annual growth rate of 3.2% since the last trough in October 2023. We use regression analysis to total capitalization of SCPs using regression analysis. estimates that the company will increase by 43% each year to 1.1T. 2025 ($77 billion today), surpassing the 2021 peak of 989b.”

The company points out that “strong correlation between M2 and SCP’s market capitalization” with a 12-month moving average of R²0.36 and a T-statistic of 5.7 (P <0.0001). Currently, Solana holds approximately 15% of SCP's market capitalization. However, Vaneck expects that proportion will rise significantly by 2025.

“Currently, Solana holds 15% of the SCP’s market capitalization, but we expect its share to rise to 22% by EOY 2025. This forecast is supported by Solana’s developer control. , supports increased market share of DEX volume, revenue and active users.”

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By combining this expected increase in market share with an autoregressive (AR) forecast model, Vaneck believes Solana’s market capitalization will rise to around $250 billion.

Short-term Sol Price Analysis

However, at this time, Solana is continuing its correction phase, with price trading at $189 at reporting time. The 4-hour Sol/USDT chart shows a well-defined descending channel characterized by a series of low highs and low lows.

Sol’s price action has been limited to the descending channel since January 18th, marked by two parallel trend lines that emphasize sustained sales pressure. The lower limit of the channel, which is now close to $175, serves as immediate support, while the boundary near $215 serves as resistance.

In particular, the SOL is currently located just below the midline of the downward channel. If it fails to exceed this level in the short term, it appears likely that it will move towards the lower boundary of the channel. Additionally, Sol continues to struggle to regain the critical Fibonacci retracement level, where a retracement of 0.236 ($203.40) serves as the first major resistance.

At the time of pressing, Sol was traded for $190.

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