Solana [SOL] has recently achieved a new milestone by recording over 5.4 million daily active users, leading to speculations about a potential price surge for its native token.
This sudden increase in network engagement has raised queries on whether the growth in on-chain activities and technical aspects might indicate a bullish trend.
Currently, SOL is being traded at $131.36, showing a 2.63% decrease in value over the past 24 hours. With a market capitalization of $61 billion, Solana holds the position of the fifth-largest cryptocurrency by market cap.
The trading volume of the token has witnessed significant fluctuations, partly influenced by recent large-scale transactions by whales.
Despite some short-term negative sentiment, the overall robustness of Solana’s network and the substantial rise in active users underscore its increasing prominence in the blockchain sector.
Are Technical Indicators Signaling a Breakout in Prices?
From a technical perspective, Solana has encountered resistance at $140, which could be a pivotal level for the bulls to overcome if a price rally is on the horizon.
The $125 support threshold has consistently provided a cushion for the token, reducing the chances of further declines in the short term.
At the moment, the 200-day moving average (MA) is positioned around $135, serving as a crucial gauge for long-term price trends.
Meanwhile, Solana’s RSI (Relative Strength Index) stands at 34.53, suggesting that the token is approaching an oversold territory, which often hints at a potential rebound.
The Driving Force Behind Solana’s On-Chain Growth
Solana’s daily active user count has reached a milestone of 5.4 million, demonstrating a surge in user adoption. Such an escalation frequently correlates with an upsurge in demand for the token, potentially leading to upward price momentum.
Additionally, Solana’s transaction volume has experienced a substantial spike, registering a 41% increase in the last 24 hours, showcasing heightened market interest and trading activity.
Nevertheless, despite the all-time high in active addresses and escalating transaction volumes, mixed whale activity has prompted caution.
While some whales are accumulating and staking their holdings, others are cashing out profits, indicating a sense of uncertainty in the short term.
Could This Trend Indicate a Bullish Future for SOL?
The surge in daily active users, alongside the uptick in transaction volumes and notable whale accumulation, point towards a bullish outlook for Solana.
Historically, such on-chain growth often foreshadows price rallies, with the oversold RSI bolstering the case for a likely upward movement.
Nonetheless, for Solana to witness a sustained price surge, breaching the critical resistance level of $140 is imperative.
With the increasing staking engagement and the overall health of its network, there are strong indications suggesting that Solana could experience an upward trend if it manages to surpass key technical thresholds.