As of now, 1 solana to gbp is worth 118.6 GBP, and its 30-day volatility is 58%. If it has to fall to 100 GBP (15.7% down), it has to breach the significant support level of 108.2 GBP (the June 2024 low). Technical analysis suggests that EMA30 (112.8 GBP) and the lower Bollinger Bands (104.6 GBP) form a potential support zone. MACD histogram has been negative for four consecutive days, and the RSI (51) is weak and neutral. Backtesting in the past indicates that with such signals, the probability of a 20-day decline is 63% (sample error ±8%). But if the activity on the SOL chain drops significantly (such as the number of active addresses below 1 million), the price can decline at a faster pace.
The eco fundamentals are stable. The Solana DeFi TVL stood at £5.36 billion this month (up 223% since the beginning of the year), of which the average daily volume of the pound stablecoin pool was £120 million, and the median slippage was 0.03%. If Visa officially enables pound settlement on Solana (with a combined transaction fee of 0.3 GBP and a time span of 2 seconds in the testing environment), it might cause institutions to increase their SOL holdings as a hedge against traditional financial costs. According to Jump Trading’s estimate, Settlement demand for every £1 billion may increase the price of 1 solana to gbp by 1.2%-1.8%. Although, if there is an emergence of regulatory threats (for instance, if the SEC deems SOL as a security), short-term selling pressure will cause the price to stray away from the model of fair value (124 GBP is now the model valuation) to 95-105 GBP.
No link can be ignored between exchange rates and macroeconomy. The expected value of the UK CPI for August came in at 3.1% (previous value was 3.4%). If the numbers are more positive than anticipated, the pound can appreciate by 1.5%, which indirectly decreases the exchange rate of 1 solana to gbp. Conversely, the likelihood of the Federal Reserve cutting interest rates has risen to 68% (CME data), and the weakening of the US dollar can make SOL recover against GBP. Derivatives market shows Deribit’s outstanding position of 100 GBP put option is 29%, and the premium value is 4.8 GBP. It has a 37% likelihood of falling to 100 GBP by the end of September, and the profit-loss ratio is 1:2.3.
On-chain data illustrates the struggle between the bulls and bears. The net increase in whale addresses with over 10,000 SOL held this month decreased by 12% since the last month (2.9 million during July and 2.55 million since August), and the average price moved from 115.8 GBP to 117.2 GBP, indicating that heavyweight investors remain willing to hold. But retail investors (less than 100 SOL) saw a net withdrawal of 1.8 million (approximately 213 million pounds) over the past week. SOL→GBPT on-chain exchange trading volume on Jupiter dropped by 19% week-on-week, reflecting the rollercoaster mood of retail markets. If the pledge ratio (the current rate of 71.5%) drops below 70%, then it might trigger a liquidation risk of up to 620 million pounds.
Regulation and technological enhancements have a two-edged risk. The UK FCA’s AML review of domestic exchanges led Binance UK to suspend the SOL/GBP trading pair for three days (July 18-21) as the price dropped by 4.3%. But Solana has planned to complete the Firedancer upgrade in September, enhancing the network stability to 99.99% (currently 99.7%), the TPS to 1 million (currently 65,000), and the technological innovation may drive the price of 1 solana to gbp to break above the resistance level of 130 GBP. In the event the upgrade is delayed or cancelled, the short-selling influence would not hesitate to take it down below 100 GBP.
Lastly, for SOL to fall to 100 GBP in the near future, there need to be a number of negative factors at play (such as regulatory crackdowns, ecological shrinkage, and a strong pound), with a probability of some 35% to 40%. But if the technological upgrade materializes and the macro environment heats up, the price will probably remain within the range of 110-130 GBP. Investors may hedge risks by purchasing put options with a strike price of 100 GBP (at a premium of 4.8 GBP) or selling perpetual contracts (with a funding rate of -0.02%), but they need to beware of the possibility of short squeeze because of an unexpected on-chain activity recovery (such as a 620% recovery of SOL from 9.8 GBP in Nov 2023).