Solana (SOL) network growth has jumped 124% since early September, according to Santiment. The analytics firm ties a long-term bullish case to that growth, which now adds about 1.71 million new wallets daily.
However, institutional demand is moving the other way. US spot Solana exchange-traded funds (ETFs) have shed $17.7 million over three straight sessions, while SOL has slipped 1.6% in the past week.
Why Santiment Reads Solana Network Growth as a Bullish Signal
Network growth counts the wallets that interact with a blockchain for the first time. Santiment’s data also shows daily active addresses on Solana rose 58% over the same period.
That brings the daily count to roughly 4.27 million unique wallets using the network. Santiment ties this activity to valuation. It notes that networks with more users have historically supported higher market caps.
“That creates a strong long-term bullish argument for SOL. Networks that attract more users and real utility have historically had greater potential to support higher market caps over time. If Solana keeps expanding its active user base, rising network value can eventually follow,” the post read.
Can Solana’s User Growth Outrun Fading ETF Demand and a Hawkish Fed?
ETF flows tell a weaker story. Spot Solana ETFs drew $188.2 million in the week ending September 25, their second-largest weekly inflow since launch, SoSoValue data shows.
Demand thinned after that. Net inflows slowed to $2.4 million the following week, and the funds then posted outflows on October 5, 6, and 7.
The withdrawals extend beyond Solana, since spot Ethereum ETFs logged six straight days of outflows through October 6.
Macro pressure adds another headwind. The Federal Reserve released minutes from its September meeting. Most officials saw another rate increase as likely appropriate by year-end.
However, traders have pared back bets on an October move, as BeInCrypto reported. That leaves the hike risk hanging over the rest of the year rather than this month.
Officials also saw inflation risks tilted higher, and some said those risks had grown recently. US inflation data on October 14 is the next test before the Fed’s October 28 decision.
Solana Price Slides as October’s Track Record Sends Mixed Signals
The pressure has weighed on Solana’s price, which, like the rest of the market, has spent this week falling. SOL traded at $116.42 at press time, down 1.64% over 24 hours, according to BeInCrypto Markets data.
Seasonal data offers little help in calling the rest of the month. According to CryptoRank, SOL has averaged a 10.5% gain in October since 2020. However, a single 80.1% rally in October 2023 accounts for much of that average.
The median October return is negative, at a 1.59% loss. Across the 6 completed Octobers since 2020, SOL closed higher in 3 and lower in 3.
Last October, SOL fell 10.3%. November has historically been stronger, posting a median gain of 15.3%.
Still, veteran trader Peter Brandt views SOL’s weekly chart favorably. He highlighted a large cup-and-handle pattern forming under a horizontal resistance line. Traders often read that pattern as a continuation signal once resistance breaks.
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