SOL Climb Above $280 Could Face Hurdles as Key On-Chain and Derivatives Metrics Dip

SOL may take longer than expected to move above $280, as several onchain and derivatives metrics have declined from their recent peaks.

Solana's (SOL) native token may take longer to move above the $280 price level due to several key onchain and derivatives metrics declining from their recent peaks.

Despite this trend, SOL could still attempt to challenge its $295 all-time high, which was reached on Jan. 19. However, the durability of recent inflows into the SOL market appears questionable.

For instance, Solana network fees dropped by 67% to $11.7 million on Jan. 21, compared to Jan. 19. This decline in fees coincides with reduced trading activity on Raydium, Pump.fun, and Orca, although overall levels remain higher than the previous week. At the same time, network fees on other decentralized applications, such as Jito, Meteora, Photon and Moonshot.money, remained unchanged.

Investors should note that memecoins are not the only use case for Solana, yet the recent demand driving network activity appears unsustainable.

Solana network daily active addresses 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 may have shifted their focus to the stock market amid optimism over lower corporate taxes, import tariffs, and a more business-friendly environment following Donald Trump's recent election victory.

The S&P 500 index advanced by 0.8% to an intraday record of 6,100 on Jan. 22, which was partly driven by Netflix. The streaming service jumped by 11% after revealing that it had crossed the 300 million mark in paid subscriptions.

Additionally, Oracle shares rose by 7%, while Nvidia climbed by 4% on news of a joint venture with OpenAI, Oracle, and SoftBank, which will involve at least $500 billion in planned investments. According to Truist’s co-chief investment officer Keith Lerner, who spoke with CNBC about the matter:

Despite the overall鈍decline in onchain activity, Solana's market share in decentralized exchanges remained strong, maintaining its top position over the past seven days.

DEX daily volumes by network. Source: DefiLlamaOn Jan. 21, Solana recorded $11.9 billion in DEX volume, while BNB Chain and Ethereum combined for $7.4 billion. Solana's dominance has remained above 45% since Jan. 16, which is higher than the previous week’s average of 34%. In essence, the slowdown in Solana's onchain activity only reflects traders' shifting focus to the stock market.

Investors may want to consider examining the leverage demand on SOL futures markets. When bullish sentiment is strong, the perpetual contract (inverse swap) funding rate usually climbs above 1.9% per month, indicating that long (buy) positions are paying for leverage.

SOL perpetual futures 8-hour funding rate. Source: CoinGlassOver the past two days, the demand for SOL leverage has been 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 U.S. approval of a spot Solana exchange-traded fund — the likelihood of revisiting the $295 all-time high soon appears limited.