Solana’s native token SOL saw a 7% surge on January 22, even though it failed to reclaim the $260 support level. More notably, SOL has gained 34% year-to-date in 2025, significantly outperforming the broader altcoin market, which rose only 10% over the same period. This growth has been largely driven by a surge in meme coin trading activity, especially following the launch of the official Trump (TRUMP) token on January 18.
SOL May Face Challenges Breaking Through $280
Several on-chain and derivatives metrics have retreated from recent highs, suggesting that a sustained move above $280 might take longer than expected. While this doesn’t rule out a potential challenge of SOL’s all-time high of $295 set on January 19, it does raise concerns about the continuity of recent capital inflows.
For instance, Solana network fees dropped by 67% from January 19 to January 21, falling to $11.7 million. This decline coincided with reduced trading activity on platforms like Raydium, Pump.fun, and Orca, though overall fee levels remain higher than the previous week. Other decentralized applications, including Jito, Meteora, Photon, and Moonshot.money, maintained consistent fee levels.
It's important to note that meme coins are not the only use case for Solana, but the recent demand driving network activity appears difficult to sustain in the near term.
Daily active addresses on the network also reflect a similar trend. According to data from Glassnode, active addresses peaked at 16.5 million on January 20 before declining to 13 million. However, evaluating Solana’s network activity in isolation—without comparing it to competitors—may provide an incomplete picture.
Traders Shift Focus to Stock Market Amid Trump Presidency Optimism
Following Donald Trump’s recent election victory, traders have turned their attention to the stock market, driven by optimism around potential corporate tax cuts, reduced import tariffs, and a more business-friendly environment.
On January 22, the S&P 500 index rose 0.8%, reaching an intraday record of 6,100 points. This surge was partly fueled by Netflix, which saw an 11% jump in its stock price after surpassing 300 million paid subscriptions. Oracle’s shares also climbed 7%, while Nvidia gained 4% amid news of a joint venture involving OpenAI, Oracle, and SoftBank, with planned investments totaling at least $500 billion.
As Keith Lerner, co-chief investment officer at Truist, noted in an interview with CNBC:
“Today is another reminder that the dominant themes of this bull market are artificial intelligence and technology.”
Solana Maintains Strong DEX Presence Despite Broader Slowdown
Despite an overall decline in on-chain activity, Solana has maintained a strong position in the decentralized exchange (DEX) market. Over the past seven days, it has continued to lead in trading volume among major blockchain networks.
On January 21, Solana-based DEX volume reached $11.9 billion, compared to a combined total of $7.4 billion on BNB Chain and Ethereum. Since January 16, Solana’s market share has remained above 45%, up from the previous week's average of 34%. This suggests that the recent slowdown in on-chain activity may reflect a temporary shift in trader focus toward equities rather than a loss of confidence in Solana.
Investors should also monitor leverage demand in the SOL futures market. In periods of bullish sentiment, funding rates for perpetual swaps often exceed 1.9% per month, indicating that buyers are paying fees to hold leveraged long positions.
Over the past two days, leverage demand for SOL has balanced between longs and shorts, with the funding rate currently at 0.5% per month. Notably, on January 20, traders briefly showed increased demand for short (sell) leverage.
In the absence of a new catalyst—such as the approval of a spot Solana exchange-traded fund (ETF) in the U.S.—a near-term retest of the $295 all-time high appears less likely.
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Frequently Asked Questions
What is driving Solana’s recent price increase?
Solana’s gains are largely attributed to increased meme coin trading and the launch of the official Trump token. Broader optimism around the Trump administration’s economic policies has also contributed to positive sentiment across risk assets.
Can Solana sustain its current growth without meme coins?
While meme coins have recently driven activity, Solana supports a wide range of decentralized applications, including DeFi, NFTs, and gaming. Long-term growth will depend on broader adoption and development activity beyond meme-driven trading.
How does Solana’s DEX volume compare to Ethereum’s?
Recently, Solana has consistently processed higher DEX volumes than Ethereum and BNB Chain. On January 21, it reached $11.9 billion in volume, demonstrating strong trader engagement and liquidity.
What is a perpetual contract funding rate?
The funding rate is a fee paid between traders in perpetual swap markets to keep the contract price aligned with the spot market. A positive rate means long positions pay shorts; a negative rate indicates the opposite.
Could a Solana ETF be approved soon?
Analysts suggest a Solana ETF is unlikely before 2026. Regulatory clarity and market maturity are key factors that must evolve before such a product gains approval in the U.S.
How do on-chain fees reflect network health?
High fees often indicate high demand and congestion. While a drop may suggest reduced activity, Solana’s fees remain elevated compared to earlier periods, signaling sustained usage.