Solana News Today: Solana’s Price Soars on Upgrades—But Onchain Activity Fades

Solana's (SOL) price has regained ground after a significant dip to $155 on August 3, with a recovery of over 36% bringing it to an intraday high of $210. This rebound has reignited bullish technical indicators suggesting that the cryptocurrency could potentially reach $1,000 if it can break through the resistance range between $210 and $250 [1]. The price action has formed a bullish megaphone pattern, also known as a broadening wedge, on the weekly chart. A breakout above the upper boundary of this pattern could trigger a parabolic rise in the price of SOL [1]. The relative strength index has also shown improvement, increasing from 49 to 61 since early August, indicating a build-up of bullish momentum [1].

In addition to favorable technical indicators, Solana’s open interest (OI) in futures markets has reached an all-time high of $13.68 billion, reflecting strong speculative interest in the derivatives market [1]. This surge in OI is seen as a precursor to significant price movements, as was observed between April and July, when a 188% increase in OI preceded a more than 103% rise in the price of SOL [1]. The current rise in OI, combined with a 17% price increase to around $217, coincides with the approval of the Alpenglow upgrade, which has bolstered investor confidence [1]. The Alpenglow upgrade, which received 98.27% support, has significantly improved Solana's performance by reducing transaction finality from 12.8 seconds to 150ms and increasing throughput to 107,540 transactions per second [1]. This upgrade is expected to enhance Solana's competitiveness against Ethereum [1].

Despite these positive developments, onchain activity on Solana has not kept pace with the price gains. Over the past 30 days, the network's transaction count has dropped by 99%, signaling a decline in onchain activity that could hinder further price recovery [1]. In contrast, Ethereum's transaction volume has increased by 39% during the same period, according to Nansen data [1]. Solana's number of active addresses has also fallen by 22%, indicating a reduction in network usage [1]. Moreover, decentralized exchange (DEX) activity on Solana has declined for the third consecutive week, with weekly DEX volumes falling by 65% to $10.673 billion, as reported by DefiLlama [1]. These trends suggest that while the price of Solana may be rising, the underlying network activity is not supporting the same level of optimism.

Analysts remain divided on the future of Solana's price. Crypto analyst Gally Sama highlighted that Solana's weekly chart shows a "bullish multimonth setup, which usually leads to strong moves," and noted that the target remains $1,000 for SOL once the current range is broken [1]. According to technical analysis, a decisive break above $210 could increase the chances of a surge to $260 and potentially lead to further price discovery [1]. However, the current drop in onchain activity may pose a challenge to the sustainability of this bullish outlook. While institutional adoption and growth in decentralized finance (DeFi) could drive Solana to new all-time highs by 2025, the current onchain data may act as a headwind [1].

Source: [1] Solana Open Interest Hits $13B All-time High (https://cointelegraph.com/news/solana-charts-1000-sol-price-target-open-interest-all-time-highs)