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- The recent uptick in SOL could mark the beginning of a significant rally towards key price points.
- Analyzing the health of the Solana network and how its recovery from the downturn in August could positively influence SOL demand.
Solana [SOL] is beginning to display indicators of a bullish trend after experiencing a bearish weekend and some uncertainty earlier this week.
Its recent performance hints at the possibility of a major rally emerging from its most recent swing low.
SOL exhibited signs of recovery in the second week of September, following a substantial wave of selling pressure that began in late August.
Nevertheless, uncertainty stemming from the FED’s announcement this week may have temporarily halted its momentum. However, with the confirmation of rate cuts, the cryptocurrency has resumed its recovery path.
The upcoming crucial short-term target for SOL could be around $150. The reasoning behind this is that SOL has primarily been held back by a descending pattern.
This positions it roughly within the $150 price range, indicating that the cryptocurrency might be positioned for an additional 10% surge from its current $140 range.
Source: TradingView
In the past two days alone, the cryptocurrency has surged by 11%. At the time of reporting, SOL’s RSI had crossed above the 50% threshold, affirming that the cryptocurrency is gaining bullish traction.
Given the nature of the latest catalyst (rate cuts announcement), there exists a significant potential for the market to experience major liquidity inflows.
This could propel SOL closer to or even above the $200 mark within weeks, particularly if Solana regains robust DeFi activity.
Evaluating the performance of the Solana network
The Solana network has encountered a notable slowdown in recent weeks, coinciding with a prevailing negative sentiment, especially during August, as illustrated by key metrics from the network.
For instance, the network’s Total Value Locked (TVL) peaked at $5.48 billion in August before plummeting to $4.66 billion earlier this month.
It has since bounced back to $4.92 billion over the past two days, indicating a restoration of confidence following the rate cuts announcement.
Source: DeFiLlama
Solana’s stablecoin market cap was considerably affected by the recent downturn, peaking at $4.067 billion on August 23 and sinking to $3.82 billion as of September 18.
The decline in activity on the Solana network is also evident in its volume and transaction metrics. The daily average volume exceeded $1.5 billion, with over 40 million daily transactions in July.
However, both metrics experienced a steep decline in August.
Source: DeFiLlama
Check out Solana’s [SOL] Price Prediction for 2024–2025
For reference, the on-chain volume fell beneath $500 million, and the number of transactions briefly dipped below 30 million at the end of August. However, there has been a modest increase in both metrics since early September.
These patterns highlight the potential for a resurgence in Solana’s previously strong on-chain activity, a development that should ideally drive greater demand for the SOL token.
