Predictions for the future value of Solana’s cryptocurrency.
The price of Solana (SOL) has dropped to around $170 on March 20, just two days after reaching a three-year high of $210. However, three important market indicators suggest that the current memecoin trend could revive the rally soon.
Despite existing holders taking profits and putting pressure on SOL price, new investors are still entering the Solana memecoin ecosystem, driving up demand. According to Coingecko, the SOL memecoin sector is now valued at over $5.8 billion.
The leading memecoin in the Solana ecosystem is Dogwifhat (WIF), with a market capitalization of $2.5 billion. It has surpassed BONK, which initially sparked the rally in late 2023. Newer Solana-hosted memecoin projects like Book of Memes (BOME) and Slerf have also achieved unicorn status within a week of their launch.
Interestingly, the demand for Solana memecoins appears to be surpassing the global meme market. While Slerf and BOME quickly reached a $1 billion valuation, popular memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB) have experienced significant pullbacks in the past week.
The trading volume to market capitalization (TVMC) ratio provides insights into why Solana memes are outperforming the broader market. The SOL memecoin sector has a TVMC ratio of 52%, indicating higher liquidity and greater investor interest compared to the global meme market average of 21%. This higher liquidity attracts more investors and swing traders, reinforcing the bullish momentum.
The memecoin trend has also had a significant impact on Solana’s social media presence. According to Santiment’s social dominance chart, Solana’s social dominance has averaged 10% in the last five days, meaning that 10% of crypto media discourse has included mentions of Solana. This increased social dominance is considered a bullish signal when it coincides with positive developments within the ecosystem.
Previous spikes in SOL social dominance have led to significant price increases in the past. Therefore, these market data points support the belief that SOL price could break out towards $250 if investor interest in Solana continues to grow and memecoins gain more market share.
Currently, SOL price is hovering above $190, rebounding 9% within the daily timeframe. The price is well above the 20-day Simple Moving Average (SMA), indicating bullish momentum in the short term. However, the upper limit of the Bollinger band indicator suggests that the price rally could face resistance around $209. If there is a decisive breakout above that level, SOL price could head towards $250.
On the downside, the 20-day SMA at $160 is a major support level to watch in case of a downturn. Given the increasing demand for SOL memecoins, a bearish reversal below that range seems unlikely in the near future.
