Solana's 20% Revenue Surge Drives Bullish Outlook Despite 1.8% Drop

Solana (SOL) is currently trading within the range of $165 to $171, experiencing a slight decline of 1.8% over the past 24 hours. Despite this drop, several on-chain metrics indicate a potential bullish reversal for the cryptocurrency. Glassnode data shows that Solana’s realized cap has stabilized after weeks of consistent capital withdrawals, with 30-day capital inflows turning positive, showing a 4-5% growth. This suggests renewed investor optimism despite the recent price decline.

Network activity on Solana remains robust, with the cryptocurrency boasting more active wallet addresses than any competing network, according to analyst Curb.sol, citing Nansen research. Solana’s transaction volume continues to outperform all other blockchain systems combined, further supporting the positive outlook. This strong network utilization has translated into significant financial success for the Solana ecosystem, which recorded its highest 12-month performance in Q1 2025. Total application revenue exceeded $1.2 billion, marking a 20% increase from the previous quarter’s $970.5 million. January alone accounted for approximately 60% of this total revenue.

Leading the ecosystem revenue race is Meme Coin Launchpad Pump, generating $257 million in income, followed by the Phantom wallet with $164 million. Meme currencies continue to thrive on Solana, challenging narratives suggesting their decline. Projects like $Trump, $Bonk, and $FARTCOIN have seen substantial growth, contributing to the overall ecosystem revenue. This ongoing success of meme coins has become a key driver for Solana’s economic activity and user engagement, strengthening its position in the broader cryptocurrency market.

Technically, Solana is developing a key setup around the $166 support level. After rising to approximately $183 on May 14, SOL has twice tested and held the $166 range with consistent support. Strong positive candles around this price point demonstrate substantial buying demand. Currently trading between $169 and $171, SOL has gained about 0.70% on the day. A breakout above either $177.51 or $183.86 could trigger a significant rise toward the $190-$200 range. However, failure to maintain the $166 support might cause a retreat toward $142.25.

Liquidation data shows a dense layer of overleveraged short positions stacked between $170 and $176. With SOL already hovering around $171, a decisive move above $176 could trigger cascading liquidations, driving further upside. On May 18, total short liquidations exceeded $1.72 million, while long liquidations remained minimal. This imbalance creates a classic setup where upside volatility could accelerate price movement through forced covering of short positions. Funding rates on Binance have turned slightly positive at 0.008% after weeks in negative territory, indicating growing willingness among traders to hold long positions and signaling a sentiment change in the market.

Social metrics also support the bullish case. Solana’s Social Dominance has climbed to 5.18%, recovering from a multi-week decline. This uptick suggests renewed interest among retail investors, typically observed during early bullish phases. Development activity remains strong at 23.38, showing that builder confidence hasn’t wavered despite price volatility. This consistent development helps maintain network fundamentals and supports investor confidence beyond speculative interest.

For now, Solana remains at a crossroads, consolidating above the crucial $166 support. Whether bulls can successfully defend this level and generate enough volume to challenge the upper resistance range will likely determine the next market direction. With positive on-chain metrics, increasing application revenue, and favorable technical setups, many analysts project Solana could see significant upward movement in the coming months if it overcomes current resistance levels.