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Solana’s Rally to $200 Slows Despite the Increasing Number of Transactions and Active Addresses

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  • Despite seeing more transaction activity and wallets, Solana’s trading volume fell by 14.84% last month.
  • While Solana has sound events happening on-chain, its performance in the market continues to weaken.
  • Because SOL’s price is not rising, many investors are flocking to Ethereum and Polygon.

Even though Solana (SOL) has seen higher levels of user activity and transactions recently, the token’s rise to $200 is slowing down. Even though Solana’s network has seen active users increase over the past six months, the SOL token hasn’t maintained an upward trend. 

Despite Solana’s Performance, Investors are Starting to Trade with Less Optimism

The weekly trading activity on this network decreased by 14.84% which was much lower than what several competing blockchains experienced.

Source: DeFiLlama

Solana, according to data, handled over $2.144 billion in trading activity within the last 24 hours and $22.77 billion over the previous week. It also holds almost 12.71% of the DEX volume, but the fall in activity suggests trader and investor caution, particularly with the shift in the broader crypto market mood.

On-Chain Metrics Don’t Always Match How Markets React

Surprisingly, the core structure of Solana’s network is holding up well. With $9.205 billion currently locked into DeFi, it seems that liquidity providers and DeFi users are still interested. 

Furthermore, transactions over the network have totaled 3 billion in the last 30 days, proving that activity hasn’t stopped on the blockchain.

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Source: Nansen

At the same time, on-chain data demonstrates that this network has handled a large number of transactions daily, each in the 50–70 million range in recent times and the rise in May was significant. The number of failed transactions has not seen much change, suggesting the network does a pretty good job.

Besides, the number of daily active addresses—an indicator of real engagement—recovered from its dip in April and is now regularly above five million. Experts often see this increase in active wallets as an indicator of increased user participation.

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Source: Nansen

Market Is Still Watching for Signs of Solana’s Recovery

Despite increasing use, Solana isn’t performing well because other aspects aside from its technology, like speculation, macroeconomic issues and how investors perceive short-term success, seem to affect it. Other networks such as Ethereum and Polygon, have posted stronger growth over the past week. 

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Ethereum: Solid Support at $2,370, Further Gains Ahead: Analyst

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  • Analysts note a solid support level at $2,370 for Ethereum (ETH), with strong buyer interest preventing further price drops.
  • Over 90% of ETH addresses are “in the money,” with holdings worth more than their purchase price.
  • Despite price volatility, active ETH addresses have dropped due to various reasons.

Ethereum (ETH) appears to have established a strong support at the $2,370 price level, according to a recent update by popular crypto analyst, Ali via X. This support price implies that buyers will consistently buy more ETH should its price drops around $2,370 to prevent it from dropping further.

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Source: X (@ali_charts)

Majority of ETH Holders Stay Profitable

According to the analyst, there is little resistance standing in the way of ETH for further upward price movement. Hence, if there are more buying pressure, Ethereum’s price would likely move upward without any major hinderance.

However, short-term volatility remains a possibility due to broader crypto market conditions.

Other analysts added that the creation of a strong support suggests that investor confidence in the digital asset is strong at current price levels. Many ETH holders are unwilling to sell their ETH holdings at less than $2,370, which will further establish this price point as a support.

The chart accompanying the post (from the IntoTheBlock platform) offers a visual display of this market dynamic. It shows that most of the current Ethereum holders are “in the money” (the value of their current holdings is way higher than the amount of they purchased them).

This positive can lead to greater confidence in the cryptocurrency. The IntoTheBlock chart also shows that 90.21% of the current addresses bought their Ethereum at prices below the current level.

Ethereum Active Addresses Decline as Price Shows Volatility

Meanwhile, the number of active ETH addresses has declined significantly in the last seven days, according to Glassnode data. The number of addresses dropped from about 46,000 to a little above 34,000 between May 12 and May 21.

Analysts suggests that market uncertainty or reduced speculative interest could be the cause of the drop in active addresses. The chart shows that there was a mismatch between the rise in the number of active addresses and Ethereum’s price.

For example, ETH’s price remained around $4,000 even though there was a sharp increase in the number of active addresses on May 17th. This price was almost the same as the cryptocurrency’s price earlier in the week even though it corresponded to smaller active addresses.

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Source: Glassnode

Current CoinmarketCap data shows Ethereum’s price to be $2,658 after gaining 3.80%.