Solana price is up today, helped by a potential spot Ethereum ETF launch in the United States and continued outperformance by Solana-based memecoins.
Solana SOL $181, the native cryptocurrency of the Solana network, has surged over 13.58% in the last 48 hours to reach an intra-day high of $188 on May 21. SOL’s monthly returns stand around 18% and 65% in the 90-day timeframe.
Solana’s performance over the last day has been accompanied by a leap in its trading volume, which has increased by 80% to $5.5 billion. This increase in price and trading activity has seen its total market capitalization increase to $80.5 billion, cementing its position as the fifth largest cryptocurrency, according to data from CoinMarketCap.
The uptick in SOL’s value so far in 2024 can be linked to several factors, including a continued outperformance of Solana-based memecoins. Meanwhile, key optimistic news updates have boosted the interim demand for riskier assets, including Solana.
Prospects of Solana being the next ETF candidate bolster SOL price
The emergence of the news that the United States Securities and Exchange Commission was engaging issuers and exchanges concerning spot Ethereum exchange-traded funds (ETFs) has increased the odds of approval later this week.
A Polymarket survey asking if an Ether ETF would be approved by May 31 jumped from 10 cents to 71 cents, representing a 71% chance that approval will take place by then.
As such, the potential approval of a spot Ethereum ETF this week has sparked discussions among analysts about the possible implications for other top-cap cryptocurrencies, including Solana.
According to Matrixport co-founder Daniel Yan, a “buy SOL/ETH” would be a better trade than a “buy ETH” if an Ethereum ETF is approved later this week. One reason he gave for this was that “SOL will be the No.1 next in line if ETH ETF gets approved.”
Another analyst and X user Gumshoe said a spot Ethereum ETF approval is “more bullish for SOL than ETH.”
Sharing sentiments similar to Yan’s on trades, Gumshoe argued that if an Ethereum ETF were approved, the next ETF would be SOL. They added that there is “less reason to buy ETH” if the ETF is rejected, as “SOL is more attractive.”
As market participants remain hopeful that the SEC will approve a spot Ethereum ETF, the crypto price continues to pump, with SOL among the beneficiaries.
Solana-based memecoins are exploding
Since the start of April, over one million new tokens have been created, with over 370,000 new tokens emerging on Ethereum and over 640,000 new tokens launched on Solana. According to a Dune Analytics dashboard pump.fun, 466,914 of the 643,000 new tokens on Solana were memecoins.
The growth in Solana token launches coincides with an impeccable price performance displayed by memecoins in this ecosystem.
The latest market recovery has been accompanied by an explosion in the prices of Solana-based memecoins led by Bonk (BONK), which is up 35% over the last 24 hours. Other notable gains have been made by Popcat (POPCAT) and Myro (MYRO), which have increased by 13.8% and 7.9% over the same time period.
The rising prices of Solana-based memecoins coincide with a rise in the total value locked (TVL) across its ecosystem—from 19.15 million SOL on March 19 to 28.90 million SOL on May 21.
The influx of new tokens, particularly memecoins on Solana, indicates heightened activity and growing adoption of the platform. More token launches typically lead to increased transactions and network usage, driving demand for SOL.
Solana technical setup highlights more upside for SOL
Despite some showing topping patterns, SOL’s market setup points to a sustained recovery for the layer 1 token. The recent support bounce near $170 has sparked increased interest, with CoinShares reporting approximately $4.9 million in inflows into Solana investment products last week.
Currently, SOL is trading 15% below the $210 range high reached on March 18. The 50-day EMA is at $154 and a positive RSI indicates that market conditions still favor the upside.
Breaching the $200 resistance suggests that the SOL price is on the path to $210, though this level may trigger profit-booking, leading to a deeper correction.
On the other hand, a break below the 50-day EMA at $154 and the 100-day EMA at $144 could signal a bearish downturn, with potential drops to $140 and $120.
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