Solana Fees Double Amid Rising Activity, SOL Price Eyes $70
Rising Fees in the Solana Protocol
In the last 30 days, the fees in the Solana protocol have doubled. According to an analysis by AMBCrypto based on the Token Terminal Dashboard, the fees rose to $131,100 on November 22. Just a few days earlier, on November 14, Solana’s total fees were still at $99,724.
Why are the fees increasing?
Similar to Ethereum, the fees in Solana are set by the network and depend on the network load and historical throughput. About 50% of each transaction fee is burned, the rest goes to the validators who process the transactions. Despite lower transaction fees compared to Ethereum, the increase means that there is a lot of activity in the Solana network. This is confirmed by the increasing number of daily active users, which has increased by 132% in the same period.
What does this mean for the SOL price?
The broad market recovery has helped the SOL price rise to $58.16 in the last 24 hours. Prior to the increase, MS2 Capital had pointed out that the $57.55 mark could be crucial for SOL. According to the Web3 Venture Accelerator, Low-Frequency Trading (LFT) – few trades over a cycle because traders are opening long-term positions – could put the token in trouble and mean a possible decline to $46.48.
High-Frequency Trading could help SOL
On the other hand, High-Frequency Trading (HFT) – an increase in the number of large transactions executed in seconds – could help SOL increase its gains. Ultimately, SOL opted for HFT as the cryptocurrency was characterized by a high order-to-trade ratio. In addition, buying pressure has dominated the SOL/USD 4-hour chart since November 22. The Relative Strength Index (RSI) was at 54.54. An RSI value above 50 suggests that SOL’s upward trend could continue.
SOL on the rise
At the time of publication, the Aroon Up (orange) was at 85.71%, while the Aroon Down (blue) was at 42.86%. This suggests that a new upward trend could be underway. If the Aroon Down falls below 30%, this would confirm this trend. But this would only be the case as long as the Aroon Up remains above 70%. In this case, bulls could potentially find profitable entry points between $58 and $60 while targeting a medium-term upward trend.
Outlook
In the future, the Solana price could continue to build on its recent recovery. If the buying momentum continues to increase, SOL’s chances of reaching the $70 mark could become more realistic.
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Source: AMBCrypto
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