Solana (SOL) price prediction: Can the Alpenglow upgrade turn the tide? Could it challenge the $300 mark by the end of the year?

Solana (SOL) has recovered from its slump at the beginning of the year, achieving a 13.2% rise year-to-date (YTD), with the price once again surpassing $200. Despite on-chain indicators showing a bearish outlook, such as the continued decline in voting transactions and daily active addresses (DAA), SOL's 24-hour trading volume has surged nearly 200%, reaching $9 billion, accounting for 7.5% of the circulating supply. This indicates a divergence between market sentiment and price movement, even as fundamentals remain weak. The upcoming Alpenglow upgrade is expected to turn the tide by reducing the final confirmation time for transactions to 150 milliseconds, bringing Web2-level responsiveness to the network.

On-chain indicators weaken and price divergence

According to data from The Block, on-chain activity on the Solana blockchain is painting a grim picture. The 7-day average of voting transactions has been declining steadily since February of this year, dropping from 300 million to the current 214 million. Meanwhile, daily active addresses (DAA) have plummeted from a peak of 5.1 million in June to 2.6 million today, a 49% retracement in just three months.

Despite the significant attention that certain meme coins in the Solana ecosystem, such as Pudgy Penguins (PENGU) and Fartcoin (FARTCOIN), have attracted recently, it seems that this has not translated into higher on-chain activity. This brings bearish expectations for the long-term outlook of SOL and explains why the token took so long to catch up with competitors like Ethereum (ETH) and BNB Chain (BNB), which set historical highs in the last cycle.

Can the Alpenglow upgrade turn the tide?

The recently approved Alpenglow upgrade is expected to change the status quo of Solana. This technological overhaul will reduce the transaction finality time to just 150 milliseconds, meaning the network will offer internet-like speeds while maintaining the enhanced security and immutability provided by blockchain technology.

The Solana Foundation emphasized in its recent comments: "At this speed, Solana can achieve Web2 level responsiveness and L1 finality, unlocking new use cases that require speed and cryptographic certainty." This may be a response to Ethereum's efforts to improve scalability and reduce gas fees through the Pectra upgrade, as the competition between smart contract platforms continues.

Solana has demonstrated its technical capacity by processing billions of dollars in volume daily through numerous successful protocols in its ecosystem, such as Raydium, Jupiter, Pumpfun, and LetsBonkfun. However, Ethereum remains the largest and most relevant blockchain in the DeFi space, with a total locked value (TVL) market share of 59%. The TVL of Ethereum's two most successful protocols, Aave and Lido, exceeds $35 billion, while the TVL of Solana's top projects, Jupiter and Jito, is only $3 billion.

SOL approaches a key resistance level, can it rise to 300 dollars?

(Source: TradingView)

From the daily chart, the SOL price has reached the critical threshold of 215 USD, and its price movement seems ready to break through the previous trend line resistance, which could bring higher gains in the short term. The Relative Strength Index (RSI) clearly indicates that SOL has been in an accumulation phase before the next wave of upward movement, which may reflect market expectations that the token will catch up with its competitors and set a new all-time high sometime during this altcoin season.

If the price can break through to 240 USD, it will confirm a potential rise to 300 USD by the end of this year. However, the poor performance of Solana's on-chain indicators is concerning, and unless Alpenglow manages to change the situation, its long-term prospects may face risks.

Solana needs to find more use cases beyond meme coins. If not, and if Ethereum manages to solve the issues that plague its operational performance, it is likely to outperform and surpass Solana in the future.

Conclusion

Solana is at a critical crossroads, with a noticeable divergence between rising prices and high volume and the ongoing decline in on-chain activity. This contradiction reflects the market's optimistic expectations for the Alpenglow upgrade against the backdrop of weak core fundamentals of the network. Solana's past successes have largely relied on the meme coin frenzy, but sustainable growth in the future will require a broader range of use cases. If Alpenglow can successfully launch and deliver Web2-level performance, Solana is expected to re-attract developers and users, allowing its price to break through existing resistance and genuinely challenge Ethereum's dominance. Conversely, if use cases cannot be broadened, the short-term benefits brought by technological upgrades may struggle to support its long-term development.