Solana price back above $20 as SOL sees a spike in active users

Solana (SOL) price has reclaimed above the $20 range after a 5% surge on May 27. The reclamation comes as the token registers a surge in active users.

Also Read: Solana Metaplex fees could push developers back to Ethereum

Solana records increased active users

Solana (SOL) has had a busy month, enduring a significant increase in its user base across May. This has seen the altcoin successfully break above the $20 resistance level. The move is remarkable considering the overall bearishness across the market, with most cryptos trading in the red throughout the month. Notably, SOL is up around 10% since May 25. In the last week, the token is up almost 7.5% to auction for $20.66 at the time of writing.

Several factors take credit for the value surge in SOL, with one key factor being the stunning grown in the number of active users in the Solana network. Data by Dune Analytics indicates that the number of active SOL users soared to around 3.5 million on May 1, a remarkable 146% rise from April 1, bringing the cumulative number of unique active users on the Solana network to an all-time high of 39.75 million.  

Santiment has also supported this development with a significant increase in the number of unique addresses that bought more than 100,000 SOL and those that bought less than 100,000.

Expert attempts to explain the growth in Solana’s user base point to the high transaction fees on Ethereum (ETH), among other networks, specifically those involving non-fungible tokens (NFTs). These have prompted users to explore alternative Layer 1 (L1) networks, with a considerable number migrating to Solana.

According to a former analyst at on-chain analysis firm Messari, Tom Dunleavy, Solana’s exponential growth in user numbers experienced a massive spike in active users in May, making it difficult for Ethereum maximalists to overlook the platform.

Another reason for the popularity growth of the Solana network is its foray into AI with a new Chat GPT plugin. The plugin was integrated into the network last week and will help onboard users into the web3 space. Among many other uses, the plugin enables users to perform various tasks like buying and listing NFTs, transferring tokens, tracking transactions, and discovering NFT collections based on their floor prices.

Solana price forecast

Solana (SOL) price bounced from critical support at $18.87 on May 25, rising almost 15% to a high of $21.40 on May 30. If the bullish momentum sustains, SOL could shatter above the resistance levels presented in the 50- and 100-day Exponential Moving Averages (EMA) at $20.99 and $21.22, respectively, paving the way for a confrontation with the 200-day EMA at $23.96. In a highly bullish case, the altcoin could tag $26.30, denoting a 30% leap from the current position.

SOL/USDT 1-day chart

Conversely, a repulsion of the EMAs could see Solana price break below the immediate support at $18.87, clearing the drains for a 20% downswing to $16.00 or in the dire case, a retest of the $12.09 swing low.