Back-to-Back Sensational Meme Coins Lead Solana Price To $200: What’s Next?

The crypto market started to feel euphoric after Bitcoin broke and eventually recorded a new ATH of $73,700 last week. Following Bitcoin’s mood, several altcoins also marched towards reclaiming past highs, and Solana became the most outperformer blue chip crypto asset. In its latest week-long run, Solana’s price surged exponentially and peaked at over $200 on March 18.

Solana blockchain has currently become the first choice for launching memecoins due to low fees and high transaction speed. The shifted market dynamics led Solana to become a leader with its price rising over 65% in the past month. This recent rally was started after SOL reached $100 in mid-February, and since then, it has risen more than 100%, according to market data from Coinmarketcap. However, the crypto market is unusually having a downward price movement at the time of writing and Solana is trading near $177. 

Solana (SOL) Price – CoinMarketCap

Let’s discuss what are the factors that fueled Solana’s price to double in the past 2 months and how it will sustain gains after the current break.

What Fueled Solana Price?

The recent uptrend in Solana price has several contributing factors, such as the rise of memecoins, the rotation into altcoins, and others. The following are 3 major reasons why Solana’s price is rising;

FTX Estate 

The long-suppressed Solana price was initially fueled by the news that investment firm Pantera is raising $250 million to buy SOL holdings from FTX estate. According to several crypto analysts, the bankrupt FTX had a huge portion of SOL in its liquidation portfolio that could be sold in the market. The Pantera’s deal gave fresh hopes of fair market selling of that holding, which contributed to an instant spike in SOL price. 

Memecoins

While Solana was already gaining at pace, the memecoin frenzy supercharged its upward movement price, leading above $200 on March 18. The Solana memecoin trend initially started with BONK, which set the stage for the ongoing memecoin season. The party was later joined by Dogewifhat (WIF), which became a sensation by becoming the fastest Solana memecoin to surpass a $1 billion market cap.

However, this memecoin mania peaked at an extreme phase in the past two days when memecoins like Book of Meme (BOME) and SNAP raised millions of SOL in presale and had a violent market launch. The unusual launch of SLERF also gained massive attention from the crypto community. All these memecoins created a strong market sentiment around SOL and pushed its price rally.

Ethereum Competition

Solana received the ultimate unfair advantage of Ethereum’s fumbling price and market sentiment. Ethereum saw a decent price rally alongside Bitcoin, but it went off the way while nearing the Dencun upgrade. The increased gas fees and lack of on-chain activity caused ETH to dip nearly 20% from $4,000 to the current price of around $3,200. Solana is also considered a close competitor to Ethereum, which provides faster transaction execution at significantly reduced cost.

There could also be additional reasons, such as profit rotation from Bitcoin, anticipation around the upcoming altcoin run, and the cold war between SOL and ETH. The potential reason would be found in the next phase after Bitcoin will retest new highs in the coming days. 

The Future of Solana

The current cryptocurrency market stance is highly influenced by Bitcoin’s small dips and reclaims, which severely affects all other crypto assets. Solana managed to keep up with the momentum and outperformed and surpassed $200. Now, the question arises: what does Solana hold for the future?

The most probable prediction for Solana is that it will break the previous all-time record of $260, which was recorded in November 2021. Generally, we see most of the altcoins reaching new all-time highs alongside the Bitcoin price discovery phase. While Bitcoin has already broken the previous cycle’s high and is preparing for a new high, Solana would also retest the all-time high and find a new all-time high in the coming months or even days.

Can Solana surpass Ethereum?

Technically, Solana would need to go through an exponential price breakout to surpass Ethereum’s market cap, which currently sits at nearly $400 billion. It would require SOL to break $1,000 to reach that market cap, and in the meanwhile, ETH would also rise in such cases. So, it is nearly impossible for Solana to surpass Ethereum in the near future.

Also Read: Can Ethereum Outpace Bitcoin in 2024?

Conclusion

Solana has become a most preferable crypto asset for traders and long-term investors who are seeing huge opportunities for the future. Several analysts believe that it has yet to reach its full potential and we might see a massive increase in Solana’s dominance in the cryptocurrency space. However, the unusual network outages have also impacted negatively on Solana’s image. Let’s see how this 3rd generation blockchain sustains in between the frequently shifting market primitives of the crypto industry.  

FAQs