After July, Solana’s network activity dropped significantly, a result that had an impact on the demand for SOL due to correlation. However, recent findings suggest that the network’s activity is finally on track for recovery. Could this lay the foundation for SOL’s recovery on the leaderboard?

Network activity is resurgent and new users are flocking to the Solana ecosystem!

User activity on Layer 1 blockchain platform Solana has seen a notable recovery over the past week, marking a significant turnaround from its recent slump.

The resurgence, marked by an increase in the number of daily active addresses and new users, signals a potential shift in the trajectory of the network and the market performance of the native token.

Of particular note is the influx of new users in the Solana ecosystem. Hello Moon data shows that the number of daily first-time unique users on the network has increased by 15%. Growth in new user adoption is a key indicator of network scaling and is likely to increase the value of SOL, enhance network liquidity, and promote increased developer activity.

The surge in demand for the network has begun to impact Solana’s fee structure and revenue streams. Artemis data shows that total fees and revenue increased 8% in the past week, reflecting growing engagement on the platform.

SOL is currently trading at $145, having inched up over 2% over the past week, holding just above the $133.58 support level. As network activity continues to gain momentum, further price gains are possible. Fibonacci retracement analysis suggests that continued network growth could push SOL to the $188.52 mark. Based on these observations, it is clear that confidence and on-chain activity are making a comeback.

Could SOL benefit from Solana's improved sentiment?

In theory, the resumption of Solana network activity should lead to an increase in demand for SOL. In fact, judging by its price action, this may already be evident. The cryptocurrency has also been moving within a rising support line.

SOL has retested the same support line twice so far this month, with the most recent retest occurring within the past 24 hours.

This support level highlights the possibility of further price gains over the weekend. When observed, the RSI has turned towards the midline but remains below this area.

An assessment of on-chain buy and sell volumes shows a decline on both sides over the past 3 days. This could be due to bearish sentiment exhaustion coupled with a lack of strong takeover demand. However, despite these observations, bullish and bearish volumes appear to be evenly matched, making it difficult to make a clear distinction.

Finally, the volume profile confirms that there is still a lot of directional uncertainty.

In other words, SOL may look bullish right now due to the rising support level and Solana’s performance. Nonetheless, it could still fall below the same support line.

Solana Price Prediction: Will SOL hit $300?

Upon closer inspection, these strong fundamentals appear to support the technical indicators, reinforcing the bullish view on Solana’s long-term prospects.

Most importantly, the cup-with-handle pattern that has formed since late 2021 favors the continued bullishness of Solana’s long-term price gains, representing a temporary pause in the prevailing uptrend.

Currently, Solana is still hovering within the channel that formed the handle, consolidating before the next move under the pressure of the current uncertain market sentiment.

This month, the bullish breakout appears to have been put on hold as the cryptocurrency market languishes amid geopolitical tensions and poor U.S. economic data. Weak momentum warns of a retest of the lower resistance.

After a brief run in the positive territory, the relative strength index (RSI) has reassured a bearish tilt, trading just below the neutral line to a steady but concerning 48.

While money inflows appear to have increased this week, with the Chaikin Money Flow (CMF) reading at a positive 0.037, it has yet to provide a big enough impetus to change this new downtrend.

However, Solana price may find this momentum prematurely as it approaches the 50SMA, which has been a strong support level so far. Therefore, sustaining above $138 seems crucial to the upper resistance of the early bailout and refocus pattern.

Once this pattern is broken, new all-time highs will be in the spotlight, with price targets as high as $400. As mass adoption and other fundamental catalysts stack up, Solana’s price could go much higher.

In simple terms

Solana appears to be showing signs of recovery after cooling off in Q3, so it is worth assessing the possibility of a similar recovery trend for SOL, and improving fundamentals. If network activity increases, it may push SOL higher to try to break out of the cup-and-handle pattern and embark on a path to new highs.