Solana Price Analysis: New Model Reveals Stunning 44.6% Undervaluation at $87

In a detailed assessment of blockchain asset valuations, a new quantitative model has flagged Solana (SOL) as potentially deeply undervalued at its current trading price near $87. This analysis, published in March 2025, calculates a fair value estimate of $156 per SOL token, representing a substantial 44.6% discount. The findings arrive during a period of heightened scrutiny for layer-1 blockchain networks and their intrinsic value propositions.

Solana Price Analysis: Decoding the Undervaluation Signal

The core of the analysis hinges on a power-law valuation model, a statistical tool increasingly applied to cryptocurrency markets. This model attempts to establish a long-term equilibrium price for an asset based on its historical network growth and adoption metrics, rather than short-term speculative sentiment. According to the model’s output, Solana’s current market price of approximately $87 sits far below its computed fair value of $156. Consequently, this discrepancy suggests a significant market inefficiency that quantitative analysts are now highlighting.

Furthermore, technical indicators provide a mixed but nuanced picture. The Relative Strength Index (RSI), a momentum oscillator, registers at 28.25. Traditionally, an RSI below 30 indicates an asset is in oversold territory, which can sometimes precede a potential rebound as selling pressure exhausts. However, the Moving Average Convergence Divergence (MACD) indicator remains in a bearish configuration, confirming that the prevailing short-term price trend is still downward. This tension between a deeply oversold condition and an active downtrend creates a complex landscape for traders and long-term investors alike.

The Mechanics of Cryptocurrency Valuation Models

Valuing decentralized digital assets like Solana presents unique challenges compared to traditional equities. Analysts therefore employ a variety of models, each with distinct methodologies and assumptions.

• Power-Law and Metcalfe-Based Models: These correlate a network’s value with its fundamental usage metrics, such as active addresses, transaction count, or developer activity. The underlying thesis is that a blockchain’s utility and security grow non-linearly with its user base.
• Network-to-Value (NVT) Ratio: Often compared to the P/E ratio in stocks, the NVT ratio divides the network’s market capitalization by its on-chain transaction volume, gauging whether the asset is overvalued or undervalued relative to its economic throughput.
• Discounted Cash Flow (DCF) for Staking: Some models treat staking rewards as a form of future cash flow, discounting them back to a present value. This approach is more applicable to proof-of-stake networks like Solana.

The model cited in this analysis appears to be a power-law variant, which has gained academic attention for its ability to model the long-term price trends of major cryptocurrencies like Bitcoin. Its application to Solana represents an evolution in analytical techniques for newer, high-throughput blockchains.

Contextualizing Solana’s Market Position in 2025

This valuation assessment does not exist in a vacuum. The broader cryptocurrency market in early 2025 continues to navigate post-halving cycles, evolving regulatory frameworks, and competition among smart contract platforms. Solana has solidified its position as a high-performance network, renowned for its low transaction fees and fast settlement times. However, it has also faced challenges, including past network outages that impacted market confidence.

Recent developments, such as the successful rollout of key network upgrades like Firedancer to enhance stability and scalability, are critical fundamental factors that valuation models attempt to quantify. Analyst reports from firms like CoinShares and Messari consistently track these metrics, providing the raw data that feeds into models like the one flagging the current undervaluation. The 51% one-year return potential forecast, while accompanied by wide confidence intervals indicating high uncertainty, aligns with historical patterns where assets correcting from oversold levels within a strong fundamental network can see substantial recoveries.

Interpreting Technical Signals and Market Psychology

The combination of a bullish valuation model and bearish momentum indicators creates a classic conflict between fundamental and technical analysis. The oversold RSI at 28.25 is a critical data point. Historically, for major crypto assets, sustained periods with an RSI below 30 have often marked areas of accumulation by long-term investors, though they are not precise timing tools.

Market veterans often watch for a bullish divergence on the MACD—where price makes a lower low but the MACD forms a higher low—as a stronger signal that bearish momentum is waning. The current analysis notes this signal has not yet appeared, urging caution. This detailed breakdown empowers readers to move beyond headline numbers and understand the probabilistic nature of market forecasts.

Conclusion

This Solana price analysis, driven by a quantitative power-law model, presents a compelling case for SOL’s significant undervaluation at the $87 price level. While technical indicators confirm the persistence of a short-term downtrend, the deep 44.6% discount to a $156 fair value estimate and oversold conditions create a high-conviction debate for market participants. As with all analytical models, the wide confidence intervals underscore the inherent uncertainty in cryptocurrency markets. Ultimately, this analysis serves as a critical, data-driven checkpoint for investors assessing Solana’s long-term value proposition against its current market price, emphasizing the importance of blending network fundamentals, quantitative valuation, and technical market structure.

FAQs

Q1: What does it mean that Solana is “undervalued” according to this model?
It means a specific quantitative model, based on historical relationships between network growth and price, calculates a theoretical fair value ($156) significantly higher than the current market price (~$87). This suggests the market may not be fully pricing in Solana’s fundamental utility.

Q2: How reliable are power-law models for cryptocurrency valuation?
They are respected tools for modeling long-term trends and identifying extreme deviations from a historical norm. However, they are not predictive crystal balls and work best as one input among many, alongside technical analysis and fundamental network health checks.

Q3: Why is the MACD bearish if Solana is supposedly undervalued?
Valuation models assess long-term fundamental worth, while the MACD tracks short-term price momentum. An asset can be fundamentally undervalued while still experiencing a period of negative price momentum due to market sentiment, macroeconomic factors, or sector-wide sell-offs.

Q4: What is an RSI of 28.25, and why is it important?
The Relative Strength Index (RSI) measures the speed and change of price movements on a scale of 0 to 100. A reading of 28.25 is below the typical oversold threshold of 30, indicating that recent selling pressure may have been excessive and the asset could be due for a near-term bounce or consolidation.

Q5: What are the main risks in relying on this undervaluation signal?
Key risks include: model error or changing historical relationships, broader cryptocurrency bear markets that depress all prices, negative Solana-specific developments (e.g., security issues), and the fact that markets can remain “undervalued” for extended periods before correcting.