Solana (SOL) has had an impressive rally over the past week, with a 12% surge in price as the ecosystem experiences increased user engagement. A major factor driving this momentum is the booming activity on Pumpfun, one of Solana’s top decentralized applications (DApps). With a cooling RSI and Pumpfun’s surging metrics, analysts are eyeing potential price increases for SOL in the days ahead.
SOL RSI Drops, Leaving Room For Further Gains
A key factor in Solana’s recent performance has been its Relative Strength Index (RSI) cooling off after nearing the overbought level. The RSI, a momentum indicator that ranges from 0 to 100, measures the speed and change of price movements. Levels above 70 suggest an asset may be overbought, typically foreshadowing a pullback, while levels below 30 indicate it may be oversold. Just a day ago, SOL’s RSI was over 70, suggesting strong buying pressure. However, the index has since cooled to 61, signaling that there is room for continued upward momentum without immediate selling pressure.
This dip below the critical threshold of 70 indicates that the recent price gains might not have been overly aggressive, leaving room for potential growth. In a healthy market setup, an RSI cooling off from overbought levels without dipping into oversold territory often signifies a consolidation phase that could fuel further gains. This positioning aligns with SOL’s recent chart behavior, suggesting potential for an extended bullish trend.
Pumpfun – A Catalyst for Solana’s Bullish Momentum?
One of the driving forces behind Solana’s recent growth is the rapid engagement on Pumpfun, a major Solana application. Since mid-October, Pumpfun has consistently set records in activity, seeing an average of 20,000 coins launched daily and peaking at 34,094 coins launched on October 22. Currently, Pumpfun accounts for nearly 50% of daily DEX transactions and volume within the Solana ecosystem, highlighting its critical role in boosting user engagement and overall ecosystem growth.
Pumpfun’s surging activity mirrors a similar trend seen earlier in the year between March and April when SOL prices rocketed from $107 to $209 as Pumpfun activity soared. Analysts believe that the current record-setting coin launches could drive SOL prices up once again, with historical data indicating that strong DApp engagement can lead to increased demand for the underlying token. If Pumpfun’s trajectory continues, Solana could see a similar positive price response.
Key Levels to Watch – SOL Price Prediction
Currently trading above all significant Exponential Moving Averages (EMA), SOL is demonstrating robust bullish momentum. EMAs are essential indicators for assessing trend direction and support levels, with shorter EMAs above longer ones confirming a bullish setup. The short-term EMA is also serving as a dynamic support, suggesting that buyers are stepping in during minor price dips.
Key price levels indicate SOL’s path forward. If it successfully breaks through the $182.46 resistance, analysts predict it could test $194.04—its highest level since July. This move would represent a significant milestone and reinforce bullish momentum. Conversely, critical support lies at $165.37 and $147.55; holding these levels is crucial to sustaining the uptrend.
With RSI comfortably below overbought levels, strong support from EMAs, and surging engagement on Pumpfun, the conditions appear favorable for continued upward movement in Solana’s price. Pumpfun’s influence on Solana ecosystem activity cannot be underestimated, as heightened DApp activity could naturally drive more users to the Solana network, thereby boosting demand for SOL.
If bullish momentum holds, SOL’s potential to reach $194 in the coming weeks seems achievable. Traders and investors will be closely watching these key levels as they gauge Solana’s next moves in this evolving bullish phase.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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