Solana price reaches $272, but what will it take for SOL to reach new highs?
Solana native token SOL (SOL) rose 7% on January 22nd, although it failed to reclaim the $260 support level. More importantly, SOL is up 34% year-over-year in 2025, while the broader altcoin market has gained 10%. This upheaval was largely fueled by memecoin's business boom, especially after the launch of the official Trump (TRUMP) token on January 18.
SOL may face hurdles to climb above $280.
SOL may take longer than expected to move above $280, as several onchain and derivatives metrics have declined from their recent highs. This trend does not prevent SOL from challenging the all-time high of $295 reached on January 19, but the sustainability of the recent inflows raises concerns. For example, Solana Network fees fell 67% to $11.7 million on January 21st compared to January 19th.
Solana Network Daily Transaction Fees, USD. Source: Defillama
Solana's fee decline coincides with reduced trading activity at Raydium, Pump.fun and Orca, although overall levels remained higher than last week. At the same time, fees on decentralized apps such as Jito, Meteora, Photon and Moonshot.money remained unchanged.
Investors should note that memecoins aren't Solana's only use case, but recent interest-driven network activity seems unsustainable.
Solana Network Daily Active Addresses. Source: Glassnode
A similar pattern emerged in daily active addresses, which peaked at 16.5 million before falling to 13 million on January 20, according to Glassnode data. Still, evaluating Solana's network activity without comparing competitors' data is naive.
Traders are moving to stocks amid optimism about Trump's presidency
Following Donald Trump's recent election win, traders may head to the stock market, buoyed by optimism about lower corporate taxes, import tariffs and a more business-friendly environment.
The S&P 500 index rose 0.8% to an intraday record of 6,100 on Jan. 22, boosted in part by Netflix, which surpassed 300 million paid subscriptions and jumped 11%. Additionally, Oracle shares rose 7%, while Nvidia jumped 4% on news of at least $500 billion in planned investments in a partnership with OpenAI, Oracle and SoftBank. Keith Lerner, Truist's co-chief investment officer, told CNBC:
Today is another reminder that the main theme of this bull market is artificial intelligence and technology.
Despite the decline in overall onchain activity, Solana's decentralized exchange market share has remained strong, maintaining its top position over the past seven days.
DEX daily amounts per network, USD. Source: Defillama
On January 21, Solana recorded $11.9 billion in DEX volume, followed by BNB Chain and Ethereum at $7.4 billion. Solana's dominance has remained above 45 percent since Jan. 16, up from last week's average of 34 percent. Basically, the slowdown in Solana's onchain activity only reflects traders' attention to the stock market.
RELATED: US Lawmaker Says TRUMP Coin Could Threaten National Security
Investors should examine the demand side of SOL futures markets. When sentiment is bearish, the funding rate for the perpetual contract (reverse swap) rises above 1.9% per month, which means long (buy) positions are paying for leverage.
SOL Sustainable future 8-hour funding rate. Source: CoinGlass
In the last two days, the demand for SOL has been balanced between bulls and bears, the indicator is currently 0.5% per month. Especially on January 20, traders showed an increase in short-term (selling) interest.
Unless there is new stimulus for SOL — such as the approval of the U.S. spot Solana exchange-traded fund — the chances of revisiting the all-time high of $295 seem limited.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
