The recent Solana crypto price surge above $200 was brief as it suffered a harsh reversal and moved into a local correction. SOL has plunged to $167, a move that has coincided with the ongoing crypto market crash.
However, fundamentals show that Solana is doing well, which may lead to a significant rebound in August.
Solana Crypto Network Transactions Have Surged
Data compiled by Nansen shows that Solana was the most dominant chain in terms of transactions and user growth. The network had over 2.48 billion transactions, a 58% increase from the previous month.
These are huge numbers that are much more than other chains combined. For example, the booming BSC Chain had 383 million transactions in July, down by 44%. Tron had 259 million, while Base, Aptos, and Near had less than 200 million during the month.
The surging transactions on Solana led to a big increase in its network fees. Fees jumped by 36% to $34 million, making it the third most “profitable” chain in the crypto market after Tron and Ethereum, which made $58.89 million and $34 million, respectively.
The only blemish in Solana’s network was that the number of active addresses tumbled by 13% during the month. Even so, its performance is a sign that Solana continues to thrive, helped by its booming meme coin ecosystem.
Newly Launched Staking SOL ETF is Booming
Solana crypto price may also rebound as American investors flock to the newly launched staking ETF. Data shows that the REX-Osprey SOL + Staking ETF (SSK), which was launched in Jul, now has over $143 million in assets.
This fund has attracted investors because it allows them to benefit from Solana’s price action and its staking rewards. As such, if SOL price crashes by 10% in a year, and its staking reward remains at 7.36%, it means that the total return will be minus 2.64%.
On the other hand, if SOL jumps by 10% and the staking yield is the same, the total return is about 18%.
Meanwhile, there are signs that Solana demand will jump in the coming months if the Securities and Exchange Commission (SEC) approves it. Some of the firms that have filed for approval are VanEck, 21Shares, and Bitwise, and the odds of approval have jumped to over 80%.
Solana Crypto Staking Inflows are Soaring
Data shows that investors are allocating more Solana tokens into their staking wallets. According to StakingRewards, the net increase in staked SOL jumped by 6 million, which is equivalent to over $948 million.
Solana has a staking market capitalization of over $68 billion, a 14% monthly increase, while the staking ratio has soared by 1.2% to 67%. A jump in staking inflow is a sign that investors expect the coin to bounce back over time.
Meanwhile, the volume of Solana leaving exchanges has jumped in the past few weeks. According to CoinGlass, over $4.7 billion worth of tokens have left exchanges in the past few weeks.
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Solana Price Technical Analysis
The daily chart shows that the SOL price has been in a strong reversal after peaking at $205 in August. This decline is in line with the ongoing crypto plunge. It is also likely because of mean reversion, which happens when an asset moves back to its historical average.
In this case, Solana’s price is nearing the 200-day Exponential Moving Average (EMA), which provides it with substantial support. The Relative Strength Index (RSI) has moved below the neutral point and is eying touching the oversold level.
Therefore, there is a possibility that the SOL price will rebound in August and reach the July high of $205. A move above that price will lead to more gains this year.
Solana price has pulled back in the past few days. However, it has strong technicals, including a mean reversal, pointing to an eventual rebound this month. It is also seeing strong ETF and staking inflows, which may boost its performance.
