After a bearish weekend and some uncertainty earlier in the week, Solana [SOL] began to show signs of a bullish trend, indicating a potential rally from its recent swing low.
In the second week of September, SOL started to recover from a period of selling pressure that began at the end of August.
Although the FED announcement this week initially caused some disruptions in its upward momentum, SOL has now resumed its recovery path following the confirmation of rate cuts.
The next key target for SOL in the short term is around $150, as historical data shows that SOL’s peaks have typically been in a descending pattern, hovering around the $150 price level. This suggests a possible 10% upside from its current $140 range.
Over the past two days, SOL has surged by 11%, with its RSI surpassing the 50% level, demonstrating a bullish momentum shift.
With the latest catalyst being the rate cuts announcement, there is a strong possibility of significant liquidity inflows entering the market, potentially propelling SOL to, or even above, the $200 range in the coming weeks, particularly if there is a resurgence in DeFi activity on the Solana network.
Examining Solana’s Network Performance
In recent weeks, the Solana network experienced a notable slowdown, reflecting the prevailing subdued sentiment in August, which impacted key metrics of the Solana ecosystem.
For instance, the network’s Total Value Locked (TVL) reached a peak of $5.48 billion in August, but then dropped to $4.66 billion earlier this month. However, it has rebounded to $4.92 billion in the last 48 hours, signaling renewed confidence post the rate cuts news.
The stablecoin marketcap within the Solana ecosystem bore the brunt of the slowdown, hitting a high of $4.067 billion on August 23rd before declining to $3.82 billion by September 18th.
The decrease in network activity is also evident in the volume and transaction metrics. July saw the network averaging a daily volume above $1.5 billion and over 40 million daily transactions.
However, August witnessed a decline in both figures, with on-chain volume falling below $500 million and transactions dropping below 30 million towards the end of the month. Nevertheless, there has been a slight improvement in both metrics since the beginning of September.
These trends hint at the potential resurgence of the robust on-chain activity previously seen on Solana, which could, in turn, stimulate further demand for the SOL token.