Solanaâs DeFi Activity Could Boost SOLâs Price â Hereâs Why
Activity on the Solana blockchain has surged recently; however, despite this uptick, SOLâs price has experienced a decline. Market indicators suggest a weakening correlation between SOL and BTC (Bitcoin), with forecasts indicating a potential drop for SOL below the $160 mark.
In the last 24 hours, Solana saw a significant increase in Unique Active Wallets (UAWs) reported by DappRadar. Decentralized apps such as Jupiter, Raydium, and Magic Eden drove this surge. Jupiter Exchange led with 307,100 UAWs, up 251%. Raydium followed with 285,200 UAWs, focusing on NFTs, while Magic Eden saw a 178% rise in UAWs, showing increased activity on Solanaâs platform.
Solanaâs Memecoin-Driven Activity and Price Volatility
The surge in activity on platforms like Raydium and Jupiter appears to be linked to the increasing trend of memecoin activity in the market. This trend is influenced by GameStop (GME) and the actions of legendary trader Keith Gill, also known as âRoaring Kitty.â
On June 7th, derivative tokens associated with Gill saw a significant uptick, leading to staggering market caps for these Solana-based tokens in a short period.
This rise in memecoin activity also signaled an increase in demand for SOL. However, despite this demand, Solanaâs price experienced a 5.44% decline in the last 24 hours, currently valued at $162.44.
Itâs worth noting that SOL struggled to sustain its hike despite increased demand. Many traders, often referred to as âdegeneratesâ in the crypto space, engage in buying memecoins with no long-term holding strategy. Instead, they quickly exchange these tokens for SOL when they reach certain gains, eventually converting it to stablecoins or fiat currency.
This pattern of pumps and dumps has become prevalent recently, suggesting continued price volatility for SOL as traders continue to engage in speculative trading practices.
Solana Price Forecast and Market Dynamics
Volatility measures the speed of price fluctuations. If selling pressure increases during periods of high volatility, the tokenâs price might decline.
Conversely, a surge in buying pressure coupled with high volatility could trigger a price breakout. However, current indications suggest that SOL may dip below $160 in the short term.
Another factor impacting SOLâs price is Bitcoin (BTC). Recent data from Santiment shows a declining correlation between Solana and BTC since June 6th, suggesting that their prices may not always move in tandem.
Therefore, even if BTC surpasses $71,000 again, thereâs no guarantee that SOL will revisit $187. However, if market recovery becomes more widespread, prices may follow a similar trajectory.
Regardless of SOLâs direction, itâs unlikely to reach $200 in the coming week. However, long-term predictions suggest that SOL could eventually reach $1,000, contingent upon overall market improvement.
â ïžDisclaimer
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.
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