Solana (SOL), one of the leading players in the cryptocurrency space, has caught the attention of traders and investors alike with its recent surge in price and network activity. The digital asset has been showing signs of a promising recovery, with analysts eyeing a potential rally towards $165. As the broader market begins to recover, Solana’s bullish sentiment is gaining traction, and its price is inching closer to significant resistance levels.

Price Recovery Points to Potential Breakout

Solana’s recent price action has been marked by a steady recovery from its lows. The cryptocurrency experienced a 3.89% intraday recovery, bringing its price up to $129 after bouncing off the $125 support zone. This upward movement has reignited hopes of a breakout rally, with $130 acting as an important threshold. If Solana can push through the $135 resistance trendline, the next major target for SOL could be the $165 mark.

On the daily chart, Solana has exhibited a bullish reversal pattern after several days of consolidation. The presence of a “morning star” pattern, consisting of two consecutive Doji candles followed by a bullish engulfing candle, signals a possible shift in market sentiment. The combination of these technical indicators suggests that SOL may be ready to challenge the resistance at higher price levels.

Active Network Addresses Show Strong Growth

One of the key factors supporting Solana’s bullish outlook is the surge in daily active addresses on the network. Over the past two weeks, the number of active addresses has seen a significant rise, from 2.77 million to 3.3 million. This sharp increase in user activity signals renewed confidence in Solana’s underlying blockchain technology and its ability to facilitate a growing number of transactions.

Moreover, the number of transactions on the Solana network has also experienced notable fluctuations. In February, Solana saw 1.62 billion non-vote transactions, with vote transactions increasing to 8.2 billion. Although this marked a slight slowdown in network activity compared to January, the trend reversed in March. The number of vote transactions rose to 8.77 billion, while non-vote transactions saw only a minor decrease to 1.54 billion.

This resurgence in transaction volume is a positive sign, indicating that Solana’s network is becoming more active and that the platform may be gaining ground in terms of usage. As more people engage with the network, the demand for SOL could increase, further supporting its price movement.

Futures Market Reflects Growing Bullish Sentiment

Alongside rising network activity, Solana’s derivatives market is also showing signs of increasing bullish sentiment. Solana Futures have seen a significant uptick in trader interest, with open interest rising by 1.88%, reaching a total of $4.88 billion. This surge in open interest suggests that more traders are placing bets on the future price movement of SOL, contributing to the growing optimism around the cryptocurrency.

The long-to-short ratio for Solana futures has also remained balanced, neutralizing at 1.0121 over the past 24 hours. This indicates that there is a healthy mix of both long and short positions in the market, with neither side dominating. Importantly, the funding rate for Solana futures has flipped positive, now sitting at 0.0034%. A positive funding rate typically signals that more traders are bullish on the asset, further bolstering the argument for a potential price rally.

Breakout Rally Could Target $165

With the rising trader interest and increased network activity, Solana is poised for a potential breakout rally. The immediate resistance level for SOL is around $135, with the next target being $138. If Solana can break through these resistance levels, it could quickly gain momentum and head towards the $165 mark, as predicted by technical analysts.

Solana’s price trajectory will likely depend on the broader market’s performance in the coming weeks. If the cryptocurrency market as a whole continues to recover, Solana could be well-positioned to capitalize on this upward momentum. However, traders should also keep an eye on the key support levels, particularly the $125 zone, which has proven to be a strong level of demand in recent days. Below that, the next major support lies at $112, with the S1 support level standing at $97.69.

Conclusion: Can Solana Reach $165?

Solana’s recent price recovery, coupled with rising network activity and increasing bullish sentiment in the derivatives market, has positioned the cryptocurrency for a potential breakout rally. If SOL can overcome the overhead resistance at $135, the $165 target could soon come into play.

While there are still challenges to be faced, particularly in overcoming long-standing resistance trends, Solana’s growing network and the positive shifts in its futures market suggest that the cryptocurrency could be on the verge of significant price gains. Traders and investors alike will be watching closely to see if the bullish momentum can be sustained, as a surge towards $165 would solidify Solana’s position as one of the most promising digital assets in the market.

As always, cryptocurrency markets remain volatile, and while the technical indicators are bullish, investors should exercise caution and remain aware of the risks involved in trading. Only time will tell if Solana can maintain its upward trajectory and reach new heights in the coming months.