Key Insights
- Solana price has pulled back in the past few days, moving to its lowest level since January 3.
- The SOL staking ratio has jumped to a high of 70% as demand rises.
- Technical analysis suggests that a rebound is possible as it has formed a cup-and-handle pattern.
Solana price continued its strong downtrend today, January 20th, reaching its lowest level since January 2nd. SOL fell to a low of $129, down over 13% from its highest this month. So, will the SOL price rebound as the staking ratio, transactions, fees, and exchange-traded fund (ETF) inflows soar?
Solana Staking Ratio is Soaring
The supply of Solana on exchanges has continued to fall over the past few days. One reason for this is that more SOL holders are staking their tokens. Data shows that the staking ratio rose to over $55 billion, giving it a ratio of 70%.
A rising staking ratio is a good thing, as it means more people are taking a long-term view. In most cases, stakers don’t sell their tokens as easily as non-stakers.
Solana has one of the biggest staking ratios in the crypto industry. Ethereum, BNB Chain, Tron, Hyperliquid, and Cardano have ratios of 30%, 18%, 46%, 45%, and 577%, respectively.
The coin has become popular among stakers because of its high staking yield. Data shows that the average staking reward is 6.1%, higher than Ethereum’s 2.85% and Tron’s 3.85%. Hyperliquid and Cardano have an annualized return of less than 3%.
Solana ETF Inflows Point to Sustained Demand
Data compiled by SoSoValue shows that there is still demand top spot Solana ETFs from American investors. While the funds suffered a $2 million outflow on Monday, these funds have added over $97 million in inflows this month.
The funds have received cumulative inflows of over $863 million since they were approved last year. These funds now hold over $1.21 billion in assets, with the Bitwise SOL ETF accounting for over $804 million. The other large Solana ETFs are by companies like Grayscale, Fidelity, and VanEck.
Solana ETFs will likely continue to add more assets once the recently filed fund by Morgan Stanley, one of the biggest banks in the United States with over $9.3 trillion in client assets and $1.9 trillion in assets under management.
Transactions, Fees, and Users Have Surged Ahead of Alpenglow Upgrade
Meanwhile, on-chain data shows the network is doing well this year, solidifying its status as the biggest player in the blockchain industry.
Data compiled by Nansen shows that it has become the most active chain in the crypto industry, handling nearly 1.9 trillion transactions in the last 30 days.
The number of active addresses on Solana jumped by 21% in this period to over 73.9 million, much higher than other networks like Arbitrum, Ethereum, and Polygon, combined.
The surge in transactions and activity has made it one of the most profitable chains despite its low network fees. It made close to $19 million in fees in the last 30 days.
This growth will likely accelerate after the network launches the Alpenglow upgrade later this quarter. This upgrade will change its architecture and make it faster and more secure.
Solana Price Technical Analysis
The eight-hour chart shows that the SOL price bottomed at $116 on December 19th last year. It then started rising because of the crypto market rally that happened earlier this year.
The token rebounded and hit the $150 resistance level, which coincided with the December 2022 high. Therefore, there are signs that it has formed a cup-and-handle pattern, a common bullish continuation pattern.
The ongoing retreat is part of the handle section’s formation. Therefore, the most likely scenario is where it will rebound in the coming days or weeks, potentially to the year-to-date high of $150, which is about 13% above the current level.
A move above that level will point to more gains, potentially to the 38.2% Fibonacci Retracement level at $170. This growth will likely lead to more gains, potentially to the key target at $200.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
