- Solana price is back above the $20 range after a bounce from the $18.87 support on May 25.
- The newly found momentum comes as the number of active users continues to increase.
- SOL could rise 30% to the $26.30 range high as cryptos attempt a recovery rally this week.
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.
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.
.@solana has seen a massive spike in active users this month.— Tom Dunleavy (@dunleavy89) May 28, 2023
Even if you are an Eth maxi hard to not have a small allocation here with so users, devs and call options not priced in (ie mobile, neon, things eth cant do (ie order book, xnfts)) pic.twitter.com/DFSOjOP6iu
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.
2/ @Solana's high throughput and scalability provides a unique opportunity to build brand new ideas with AI.— Solana Foundation (@SolanaFndn) April 25, 2023
These grants are meant to encourage the Solana ecosystem to explore new use cases of these novel technologies.
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.