Solana Price News: Can SOL Continue to Rise as DAAs Keep Plummeting?

Solana (SOL) has recovered from its early losses this year and has now booked a year-to-date (YTD) gain of 13.2% as the price of SOL advances once again above $200.

Trading volumes in the past 24 hours have exploded by nearly 200% and currently account for 7.5% of the token’s circulating supply at $9 billion despite the fact that on-chain metrics favor a bearish outlook.

Data from The Block paints a dire picture for the Solana blockchain. The 7-day moving average for vote transactions has been steadily dropping since February this year from 300 million to 214 million at the time of writing.

Solana On-Chain Metrics – Source: The Block

Meanwhile, daily active addresses (DAAs) have declined dramatically from a peak of 5.1 million in June this year to 2.6 million as of today – a 49% retreat in just three months.

Despite the significant interest that certain meme coins in this ecosystem like Pudgy Penguins (PENGU) and Fartcoin (FARTCOIN) have drawn lately, this does not seem to be translating into higher network activity.

Hence, this favors a bearish long-term outlook for SOL and explains why it has taken so long for the token to catch up with its rivals as Ethereum (ETH) and BNB Chain (BNB) have both made new all-time highs during this cycle.

Alpenglow Upgrade Could Turn the Tide for Solana

The successful implementation of the Alpenglow upgrade could change things for Solana. Approved just a few days ago, this technical overhaul will reduce transaction finality to just 150 milliseconds, meaning that the network will offer Internet-like speeds but with the enhanced security, transparency, and immutability of blockchain technology.

Expected Outcomes of Latest Solana Upgrades – Source: Solana Foundation

“At these speeds, Solana could realize Web2-level responsiveness with L1 finality, unlocking new use cases that require both speed and cryptographic certainty,” the Solana Foundation highlighted in its recent commentary about Alpenglow.

This may be a response to Ethereum’s efforts to improve scalability and reduce gas fees via the Pectra upgrade as the war between smart contract platforms continues.

Solana has shown its technical capacity already as it handles billions in trading volumes every day through the many successful protocols launched within its ecosystem like Raydium, Jupiter, Pump.fun, and LetsBonk.fun.

However, Ethereum continues to be the largest and most relevant blockchain in the DeFi space with a 59% market share in terms of total value locked (TVL). Its two most successful protocols are Aave and Lido with a TVL exceeding $35 billion while Solana’s top projects are Jupiter and Jito with a TVL of just $3 billion.

SOL Hits Key Resistance – Will It Rise $300?

Looking at the daily chart, we can see that the price has hit a key threshold at $215 and the price action seems ready for a breakout of its former trend line resistance that could lead to much higher gains in the near term.

SOL/USD Daily Chart (Binance) – Source: TradingView

The Relative Strength Index (RSI) shows clearly that SOL has been in an accumulation phase ahead of this next leg up as the market probably expects that the token catches up with its rivals and hits a new all-time high at some point during this altcoin season.

If we get a move to $240, that would confirm an upcoming surge to $300 before the end of this year. However, the poor performance of Solana’s on-chain metrics is worrying and could endanger its long-term prospects unless Alpenglow manages to change the status quo.

Solana needs to find more use cases beyond meme coins only. If it doesn’t, Ethereum will likely outperform and outpace the network if the issues that have plagued its operational performance in the past are ultimately solved.