Solana’s native token SOL (SOL) rose 7% on Jan. 22, despite failing to reclaim the $260 support level. More importantly, SOL has climbed 34% year-to-date in 2025, while the broader altcoin market gained 10%. This upswing has largely been fueled by memecoin trading hype, especially after the Official Trump (TRUMP) token launch on Jan. 18.
SOL climb above $280 could face hurdles
SOL may take longer than expected to move above $280, as several onchain and derivatives metrics have declined from their recent peaks. This trend does not prevent SOL from challenging its $295 all-time high reached on Jan. 19, but it does raise concerns about the durability of recent inflows. For example, Solana network fees dropped 67% to $11.7 million on Jan. 21, compared to Jan. 19.
Solana network daily transaction fees, USD. Source: DefiLlama
The decline in Solana fees aligns with reduced trading activity on Raydium, Pump.fun, and Orca, though overall levels remain above the previous week. At the same time, fees stayed unchanged on other decentralized applications, such as Jito, Meteora, Photon and Moonshot.money.
Investors should take note that memecoins are not Solana’s sole use case, yet the recent demand driving network activity appears unsustainable.
Solana network daily active addresses. Source: Glassnode
A comparable pattern surfaced in daily active addresses, which peaked at 16.5 million on Jan. 20 before slipping to 13 million, according to Glassnode data. Still, it would be naive to evaluate Solana’s network activity without comparing data from competitors.
Traders shift to stocks amid optimism over Trump’s presidency
Traders might have pivoted to the stock market, driven by optimism about lower corporate taxes, import tariffs, and a more business-friendly environment following Donald Trump’s recent election victory.
The S&P 500 index advanced 0.8% to an intraday record of 6,100 on Jan. 22, boosted in part by Netflix, which jumped 11% after surpassing 300 million paid subscriptions. Additionally, Oracle shares rose 7%, while Nvidia climbed 4% on news of a joint venture with OpenAI, Oracle, and SoftBank, involving at least $500 billion in planned investments. Keith Lerner, Truist’s co-chief investment officer, reportedly told CNBC:
“Today is yet another reminder that the dominant theme of this bull market is artificial intelligence and technology.”
Despite the overall downturn in onchain activity, Solana’s market share in decentralized exchanges remained strong, preserving its top position over the past seven days.
DEX daily volumes by network, USD. Source: DefiLlama
On Jan. 21, Solana recorded $11.9 billion in DEX volume, while BNB Chain and Ethereum combined for $7.4 billion. Solana’s dominance has stayed above 45% since Jan. 16, higher than the previous week’s average of 34%. Essentially, the slowdown in Solana’s onchain activity only reflects traders’ shifting focus to the stock market.
Related: US lawmaker says TRUMP coin could risk national security
Investors should examine the leverage demand on SOL futures markets. When bullish sentiment prevails, the perpetual contract (inverse swap) funding rate typically climbs above 1.9% per month, which means long (buy) positions pay for leverage.
SOL perpetual futures 8-hour funding rate. Source: CoinGlass
Over the past two days, the demand for SOL leverage has remained balanced between bulls and bears, with the indicator currently at 0.5% per month. Notably, on Jan. 20, traders briefly showed increased demand for short (sell) leverage.
Unless a new catalyst emerges for SOL — such as US approval of a spot Solana exchange-traded fund — the likelihood of revisiting the $295 all-time high soon appears limited.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.