Solana [SOL] recently hit a new record of over 5.5 million daily active addresses, sparking discussions about a potential increase in the price of the native token.
The surge in network activity raises questions about whether on-chain growth and technical factors signal bullish momentum. Currently, the token has seen significant volatility in trading volume, in part due to recent whale activity. Despite some short-term bearish sentiment, the overall strength of the Solana network and significant growth in active users highlight its growing prominence in the blockchain space.
Do technical indicators indicate a breakout rebound?
From a technical perspective, Solana is facing resistance at $140, which could become a crucial price level for the bulls to break through if a rally is to occur.
The $125 support level has been providing a safety net for the coin, reducing the likelihood of further declines in the short term. Currently, the 200-day moving average (MA), a key indicator of long-term price trends, is hovering around $135.
Meanwhile, Solana’s RSI (Relative Strength Index) is 34.53, indicating that the coin is approaching oversold territory, which is often a sign of a potential rebound.
Solana has over 5.5 million daily active addresses, far exceeding all competitors and leading Ethereum Layer 2. Solana's 5.5 million wallets account for about half of the main network's total active addresses (about 11 million), indicating increased user adoption. Such growth is generally associated with increased demand for tokens, which can translate into upward price pressure.
To back up this staggering statistic, Solana also regularly claims to process over 500 real transactions per second, beating out its competitors by a considerable margin.
However, there is widespread consensus in the crypto community that these metrics can be easily manipulated. Anyone can create an unlimited number of wallets, which means that an active wallet does not necessarily equal a unique user.
Solana is known for its high performance and low fees. This inherent scalability makes it easier for malicious actors to generate artificially inflated activity. Supporters of rival chains believe that the recent surge in Solana active addresses may be due to memecoin developers distributing worthless tokens in large quantities to new wallets.
Additionally, Solana’s trading volume has surged, up 11% in the past 24 hours, reflecting increased market interest and trading activity. Despite Solana’s record number of active addresses and rising trading volume, mixed whale activity raises red flags. Some whales are accumulating and staking, but others are taking profits, suggesting short-term uncertainty.
Strategic partnerships and institutional investments
New partnerships and institutional investments are key developments in the cryptocurrency market that propel protocols forward. Solana recently joined forces with cryptocurrency exchanges Binance and Bidget to launch liquid staking tokens BNSOL and BGSOL, respectively.
Such major collaborations typically create win-win situations for both parties, increasing the utility of both parties. Additionally, as more institutions integrate Solana’s technology, its market appeal will increase, potentially pushing Solana to new heights.
Solana Price Looks to Break Out of 6-Month Consolidation Phase
During the six-month consolidation, the Solana price prediction shows a flag pattern forming on the daily chart. This chart pattern consists of a long bar representing the dominant trend and two downward sloping trendlines to promote counter-trend moves.
At press time, SOL is trading at $134.71, with the market cap rising to $63 billion. A breakout above the overhead trendline will signal a resumption of the current uptrend.
At the same time, an increase in daily active addresses, coupled with an uptick in transaction volume and a significant accumulation of huge tokens, points to a promising future for Solana. This on-chain growth often precedes price increases, and an oversold RSI supports a potential upward trend.
However, for Solana to achieve sustained price gains, it will need to break through the critical $140 resistance level. Given the rising staking activity and overall network health, there are strong signs that Solana could see upward momentum if it breaks above key technical levels.
