Solana stays hot as cryptocurrency market cools down.
Solana’s price has surged past the $100 mark on January 18th, and key on-chain metrics are indicating a potential rally towards $120.
Following the approval of the Bitcoin spot ETF, investors have been diverting their funds towards altcoin markets, resulting in a decline in Bitcoin dominance. Layer-1 projects like Solana, Ethereum, and Cardano have experienced increased demand this week.
Solana’s network usage has reached its highest point since 2024. Despite the high volatility in the cryptocurrency markets, Solana bulls have successfully defended the $90 support level. Currently, SOL is trading above $103.
On-chain data reveals that Solana has seen significant growth in its fundamental metrics this week. TokenTerminal’s active user count data tracks the participation rate of a blockchain network by aggregating the number of unique addresses conducting valid transactions.
On January 17th, Solana’s daily active user count reached 429,162 addresses, the highest in 2024. The last time network activity reached these levels was on December 25th when the SOL price briefly surpassed $126.
An analysis of the chart shows that Solana’s daily active user count has been increasing since January 15th. This increase in daily active users is considered a strong bullish signal as it indicates that SOL’s growth is driven by fundamental demand for products and services on the Solana network, rather than speculation by swing traders.
Moreover, the rise in fees paid to Solana’s proof of stake validators further confirms the increase in network usage. As network demand has risen, fees received by stakers have significantly increased. This could incentivize stakers to stake more SOL coins to take advantage of the rising fees.
With rising network activity and increasing fees, Solana’s price is predicted to reclaim the $120 level. The parabolic stop and reverse (SAR) indicator supports this bullish outlook. Currently, the SAR dots for Solana point to $106, suggesting a growing bullish momentum.
If the bulls can gather enough momentum to break past the initial resistance at $106, a move towards $120 is likely. However, a downward swing below $90 could negate this prediction, but given the rising network demand, a significant decline is less probable in the short term.
