Solana (SOL) value has retraced towards $170 on March 20, barely 48 hours after reaching a 3-year peak of $210: 3 very important market indicators counsel the rising memecoin rave might quickly revive the rally.
Solana has been topic to intense volatility over the previous week. However with the memecoin rave nonetheless in movement, what are the possibilities of SOL value advancing in the direction of $250 within the days forward?
Demand for Solana memecoins outpaces the worldwide meme market
Whereas SOL value groans underneath intense profit-taking amongst present holders, new entrants aping in on Solana’s rampaging memecoin ecosystem proceed to prop up demand.
After a relentless rally in Q1 2024, the SOL memecoin sector is now value over $5.8 billion in line with Coingecko’s newest combination information.
Dogwifhat (WIF) with a market capitalization of $2.5 billion now leads the pack having leapfrogged BONK, which initially kicked off the rally with the Saga cellphone rave in late 2023.
Newer Solana-hosted memecoin initiatives like E book of Memes (BOME) and Slerf, each launched in March 2024 occupy the third and fourth spots respectively, having achieved unicorn standing inside every week post-launch.
Zooming out, the SOL memecoin ecosystem now seems to be attracting a disproportionately greater demand in comparison with the worldwide meme sector. For context, whereas Solana’s Slerf and BOME raced to $1 billion valuation, world high canines like Dogecoin (DOGE), Shiba Inu (SHIB) have suffered double-digit pullbacks previously week.
The buying and selling quantity to market capitalization (TVMC) ratio supplies information pushed insights into the catalysts behind Solana memes outperforming the broader markets.
The SOL meme sector has a buying and selling quantity to market capitalization (TVMC) ratio of 52%, which signifies greater liquidity and higher investor curiosity, than the worldwide meme market common, which at present stands at 21%.
As a rule of thumb TVMC, higher than 50% is taken into account excessive, particularly throughout a interval of worldwide market correction.
The liquidity depth within the SOL memecoin markets at present makes it simpler for traders to execute trades with out considerably impacting costs. This elevated liquidity then tends to draw extra traders and strategic swing merchants, additional reinforcing the bullish momentum.
Memecoin rave is driving Solana up the media developments tables
Memecoins by design are primarily pushed by vibrant social media developments and world group exercise. Unsurprisingly, this memecoin rave has had a big affect on Solana’s social developments and media traction in latest weeks.
Santiment’s social dominance chart presents the proportion mentions of a cryptocurrency throughout related crypto media channels, compared to the highest 50 initiatives.
The chart above exhibits that SOL social dominance has averaged 10% within the final 5 days courting again to March 15. Successfully this suggests that 10% of complete crypto media discourse this week has included mentions of Solana.
Elevated social dominance is usually thought of a bullish sign, when it coincides with constructive developments inside the ecosystem, because it signifies that the cryptocurrency is receiving vital curiosity.
Whereas incessant community outages have been a significant speaking level this week, the Solana memecoin rave and the flurry of exercise surrounding the networks’ fourth anniversary have been extra outstanding.
Additionally, a more in-depth take a look at the chart exhibits that earlier spikes in SOL social dominance in December 2023 and January 2024 have each led to vital value upswings.
Solana value forecast: Rocky highway to $250?
These vital market information factors affirm the bullish outlook that SOL value might expertise a significant breakout in the direction of $250, if the Solana retains gaining traders’ mindshare and the memes preserve encroaching extra market share.
On the time of writing on March 21, SOL value is nestled simply above the $190 mark, having rebounded 9% inside the day by day timeframe. With the present costs far exceeding the 20-day Easy Shifting Common (SMA), the bulls look like in charge of the short-term momentum.
![Solana memecoin sector now worth $6B: BONK, WIF investors driving SOL price to $250? - 1](https://crypto.news/app/uploads/2024/03/SOLUSD_2024-03-21_08-07-00.png)
Nonetheless, the upper-limit of the Bollinger band indicator highlights that the Solana value rally might hit a significant bump on the $209 space. However a decisive breakout above that sell-zone might see SOL value head in the direction of $250 as predicted.
On the flip aspect if a downturn units in, the 20-day SMA at $160 might the most important help territory to look at. Given the rising demand for the SOL native memes, a bearish reversal under that vary appears unlikely within the near-term.