Solana Price Prediction: After a strong Rebound of SOL in July, can it continue the upward momentum in August to challenge 200 USD?

Riding the wave of the market rebound in July, Solana once again established its dominant position as a highly resilient altcoin. Following the upward momentum of Bitcoin, the price of SOL briefly broke through the $200 mark, reaching a cycle high of $206.19 on July 22. This price surge triggered a spike in on-chain activity within the Solana ecosystem, boosting its Total Value Locked (TVL) in DeFi, DEX volume, and overall on-chain revenue. However, signs of weakness have begun to appear. SOL has fallen back below the $190 threshold, facing selling pressure, indicating that investors may be rotating out after locking in July's gains. What are the expectations for Solana in August? Can its strong momentum continue?

The rebound of SOL has driven a surge in the network: July performance is impressive

From July 1 to July 22, SOL maintained a steady increase, with a price rise of 40%. As the price of SOL surged, the on-chain value of tokens locked in lending pools and vaults on the Solana network also increased, thereby boosting the network's Total Value Locked (TVL).

TVL Growth: As of the time of writing, Solana's Total Value Locked is $9.85 billion, which is an increase of 14% compared to last month.

DEX volume: In the past 30 days, DEX volume has increased by 30%, and just this month alone, transactions have exceeded 82 billion USD.

Network Revenue: The surge in trading activity has translated into higher network revenue. According to DefiLlama, Solana has generated $4.3 million in revenue since the beginning of July, an increase of 13% compared to $3.81 million in June.

As prices fall and user activity declines, the Solana ecosystem gradually cools down

However, with the approach of August, the momentum of the Solana network is weakening. As of the time of writing, SOL has fallen to around 180 USD, and signs of weakening demand across the entire network are becoming apparent.

Daily Active Address Count Decline: The daily active address count on Solana has significantly decreased over the past seven days. According to Artemis, it has declined by 16% during this period. The decrease in daily active addresses on the network indicates a reduction in user engagement and on-chain activity. The drop in active addresses reflects a slowdown in volume, dApp usage, and overall demand for network services. For Solana, a 16% fall suggests declining engagement, which implies a broader cooling of network growth as the new trading month begins.

DeFi TVL falls: With the decline in overall network activity, Solana's DeFi TVL has also started to fall. Over the past week, TVL has decreased by 8%. This indicates that users are either withdrawing assets from on-chain DeFi protocols or the value of these assets is declining due to market fluctuations.

Solana Bear Market Hovers Near Price Collapse Point: Technical Analysis

(Source: Trading View)

SOL's decline over the past few days has dangerously pushed its price close to the 20-day Exponential Moving Average (EMA), which forms a critical dynamic support line at $178.25. As of now, SOL is trading at $180.51.

The 20-day moving average measures the average trading price of an asset over the past 20 trading days, giving more weight to recent prices. If it indeed falls below this level, it could open the door for further declines, especially in the context of decreasing volume and network activity. In this scenario, the price of SOL may drop to $171.78.

On the other hand, if market sentiment improves, this bearish expectation will fail. In this case, the price of the token may rebound to $186.40. A successful breakout above this level could drive the token up to $190.47.

Conclusion:

After a strong rebound in July, Solana faces the challenge of weakening momentum as it enters August. The decline in active addresses and DeFi Total Value Locked, along with the price approaching key support levels, indicates potential downside risks. Whether SOL can maintain its resilience in August will depend on its ability to hold key technical support and regain an increase in user activity.