Solana Transaction Fees Rise — Will Bearish Sentiment Affect SOL Price?
SOL struggles to continue its upward momentum, and with rising fees will the price turn bearish?
Key Takeaways
- Solana sees an upturn in financial and network performance.
- Transaction fees rose and the network’s users are still highly active.
- SOL’s TVL hit $2 billion, showing growth since December 2023.
Over the past three months, Solana has seen a notable uptick in its financial and network performance. The cryptocurrency’s price has shown bullish trends, even though overall market sentiment towards Solana has turned bearish.
After reaching its highest point since April 2022, of $125 on December 25, SOL has struggled to maintain upward momentum. After a pullback to $80 on January 23, the price made another attempt to continue its uptrend but made a lower high of $118 on February 15 before starting to decline again.
Solana Fundamentals
A significant development within Solana‘s ecosystem is the rise in its average transaction fees. These have now risen above $0.03. Even though this is still relatively cheap , it is still more expensive than many layer 2 solutions like, for example, Polygon.
This increase in transaction costs raised concerns about potential impacts on network activity. However, data from Artemis indicates that Solana‘s daily active addresses and transaction counts have remained high, suggesting users are willing to bear the higher fees.
In the DeFi sector, Solana’s Total Value Locked (TVL) achieved a new milestone by reaching the $2 billion mark. This shows consistent growth since December 2023. However, this is still far from its all-time high of $9.3 billion, which it reache in mid-November 2021.
SOL Price Analysis
Solana’s price has been in a large uptrend from September 11, when it made a higher low of $17. According to our Elliott Wave count, this was the start of wave three, with its December peak of $128 being its ending point.
We have been anticipating a correction in the form of consolidation above $80. Now, with the price making a lower high on February 15 and falling below $104, we expect this correction to have one more descending move before it ends.
In the best-case scenario, it would manage to stay above $80. After finding support there, one higher high would be expected. Our target is $167, which would mark the completion of this larger uptrend from June 15. This would mean that SOL could enter a more significant correction phase.
First, however, we need to see what happens when SOL reaches $80. It could continue moving below it, beginning the correction phase.
Disclaimers
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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