Key Takeaways
What’s driving Solana’s recent bullish momentum?
Surging on-chain activity, stablecoin transfers, and rising dApp usage are fueling Solana’s upward trend.
What technical levels are critical for Solana’s continued rally?
SOL must hold above its 50DEMA at $220 to maintain momentum, with $254 as the next resistance target.
Since hitting a low of $190 a week ago, Solana [SOL] has traded within an ascending channel, hitting a high of $237.
At the time of writing, Solana was trading at $230, after moderately dropping by 0.43% on the daily charts. Prior to this slip, Solana had been on an upward trajectory, hiking by 13.8% on weekly charts.
Can SOL hold this upward momentum?
Solana’s on-chain activity booming
Significantly, amid favorable market conditions, Solana’s on-chain activity has recently skyrocketed.
According to Defillama, since the market rebounded, the number of Active addresses has stabilized above 2 million, averaging 2.2 million daily.
Source: Defillama
Typically, when active users spike, it suggests that more entities or people are transacting, deploying contracts, trading, or using dApps. A clear sign of adoption and demand growth.
In fact, the number of Daily Transactions has also surged considerably, averaging 60 million daily transactions with a low of 50 million transactions.
Equally, adjusted transaction volume surged 115% reaching 297.5 billion over the past 30 days.
Source: Artemis
These growing transactions are even more prevalent when we examine stablecoin transactions on Solana. Inasmuch, stablecoin transfers have hiked 12.54% to 211.3 million over the past thirty days.
Usually, when users and transactions rise in tandem, it signals strengthening fundamentals and growing network adoption, a clear bullish sign.
Solana’s ecosystem thriving
According to Artemis, dApps on Solana have experienced significant growth, thus driving the observed network activity.
As such, Raydium [RAY] leads with 855k users, followed by Pump.fun AMM and Jupiter [JUP], indicating that speculation and DeFi are key Solana drivers.
Source: Artemis
Solana’s app fees have remained strong, averaging between $10 million and $20 million daily, with occasional spikes reaching $30 million. On the 4th of October, Solana-based apps generated $13.7 million in fees.
Meanwhile, app revenue has consistently ranged from $5 million to $12 million per day.
Source: Defillama
At press time, revenue stood at $6.15 million, highlighting robust economic activity on the network. This growing activity enhances Solana’s appeal to developers and liquidity providers.
Demand in the open market remains steady
Besides, a solid network activity, Solana is experiencing a sustained capital flow into the futures market, signaling actual investor demand.
According to Defillama, Perpetual Volume bounced back from $0.8 billion to $3 billion after SOL prices rebounded.
Source: Defillama
At press time, Perpetuals Volume stood at $2.9 billion, indicating strong activity in Solana’s futures market from both long and short traders.
However, AMBCrypto’s analysis of the Long Short Ratio shows a clear bullish bias, with the ratio at 2.49 and longs making up 71% of all futures positions.
Source: Coinalyze
Can SOL rebound continue?
AMBCrypto’s analysis shows that Solana’s network activity has steadily increased, strengthening its overall ecosystem. This growth has contributed to SOL’s solid performance on the price charts, suggesting favorable conditions for further gains.
At the time of writing, SOL was trading above the Parabolic SAR level of $197, with both the long-term EMA at $195 and the short-term EMA at $220 signaling strong upward momentum.
Source: TradingView
If demand for SOL and its network activity continues to grow, the token could test the next resistance level at $254, where the Parabolic SAR previously retraced before the last correction.
To maintain this bullish outlook, SOL needs to close above its 50-day EMA at $220. If it fails to do so, the price may decline, with the 200-day EMA at $195 serving as a key support level.