Solana Price Prediction: Active Users Signal Big SOL Move
The Solana (SOL) cryptocurrency has been trading relatively range-bound in recent times, with bulls managing to defend the $100 psychological threshold ahead of the Federal Reserve's interest rate decision. Despite the challenging macroeconomic backdrop, which includes inflation in the United States being nearly 200 basis points higher than the central bank's target, an on-chain metric suggests that a massive price move is about to take place based on historical patterns.
Increasing Daily Active Users Signal Potential Price Move
Data from Santiment shows that daily active users (DAUs) within the Solana network have been steadily increasing since mid-August, following the release of a set of new rules for the crypto industry by the U.S. Securities and Exchange Commission (SEC). This increase in DAUs could be indicating that users are positioning for a strong reaction by the market, even stronger than the one seen right after the news. Historically, there have been five instances where the 30-day and 50-day moving averages for this metric have crossed over, resulting in strong price movements for SOL.
Historical Patterns Suggest Bullish Price Movement
In the past, when the 30-day and 50-day moving averages for DAUs have crossed over, the price of SOL has experienced significant movements. Given the current bullish bias in the market, following a breakout above the 200-day exponential moving average (EMA), it is expected that the direction of this next move should favor bulls. However, there is also uncertainty associated with the Fed's next interest rate decision, which could derail the rally and prompt a strong decline.
Key Support Levels to Watch
The daily chart shows that bulls have managed to keep SOL trading above $100, with strong buying pressure at this level indicating that late buyers are accumulating tokens to position for the continuation of this rally. However, it is possible that Solana could drop back to $90 before resuming its uptrend, especially if liquidity dries up. This is a key support level to watch, as it is in confluence with a former area of resistance and the 200-day exponential moving average (EMA).
Momentum Remains on the Side of Bulls
Despite the Relative Strength Index (RSI) dipping below 60, momentum remains on the side of bulls. If the rally resumes, the short-term target of $120 for SOL is maintained, implying a 20% upside potential for the token based on its current trading price.
What to Watch Next
The market's reaction to the Fed's interest rate decision will be crucial in determining the direction of the Solana price. If comments from the head of the central bank are more hawkish than expected, it could derail the rally and prompt a strong decline. On the other hand, if the market continues to be buoyed by the SEC's new rules, it could lead to a further increase in DAUs and a subsequent price move.
