Solana memecoin sector now worth $6B: BONK, WIF investors driving SOL price to $250? 

Solana (SOL) price has retraced toward $170 on March 20, barely 48 hours after reaching a 3-year peak of $210: 3 vital market indicators suggest the growing memecoin rave could soon revive the rally. 

Solana has been subject to intense volatility over the past week. But with the memecoin rave still in motion, what are the chances of SOL price advancing towards $250 in the days ahead? 

Demand for Solana memecoins outpaces the global meme market 

While SOL price groans under intense profit-taking among existing holders, new entrants aping in on Solana’s rampaging memecoin ecosystem continue to prop up demand. 

After a relentless rally in Q1 2024, the SOL memecoin sector is now worth over $5.8 billion according to Coingecko’s latest aggregate data. 

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 phone rave in late 2023. 

Newer Solana-hosted memecoin projects like Book of Memes (BOME) and Slerf, both launched in March 2024 occupy the third and fourth spots respectively, having achieved unicorn status within a week post-launch.  

Solana memecoin ecosystem approaching $6 billion | March 2024 | Source: Coingecko

Zooming out, the SOL memecoin ecosystem now appears to be attracting a disproportionately higher demand compared to the global meme sector. For context, while Solana’s Slerf and BOME raced to $1 billion valuation, global top dogs like Dogecoin (DOGE), Shiba Inu (SHIB) have suffered double-digit pullbacks in the past week. 

The trading volume to market capitalization (TVMC) ratio provides data driven insights into the catalysts behind Solana memes outperforming the broader markets. 

The SOL meme sector has a trading volume to market capitalization (TVMC) ratio of 52%, which indicates higher liquidity and greater investor interest, than the global meme market average, which currently stands at 21%.

As a rule of thumb TVMC, greater than 50% is considered high, especially during a period of global market correction. 

The liquidity depth in the SOL memecoin markets currently makes it easier for investors to execute trades without significantly impacting prices. This increased liquidity then tends to attract more investors and strategic swing traders, further reinforcing the bullish momentum. 

Memecoin rave is driving Solana up the media trends tables

Memecoins by design are primarily driven by vibrant social media trends and global community activity. Unsurprisingly, this memecoin rave has had a significant impact on Solana’s social trends and media traction in recent weeks. 

Santiment’s social dominance chart presents the percentage mentions of a cryptocurrency across relevant crypto media channels, in comparison to the top 50 projects. 

Solana social dominance vs. SOL price | March 2024
Solana social dominance vs. SOL price | March 2024 | Source: Santiment

The chart above shows that SOL social dominance has averaged 10% in the last five days dating back to March 15. Effectively this implies that 10% of total crypto media discourse this week has included mentions of Solana.

Increased social dominance is often considered a bullish signal, when it coincides with positive developments within the ecosystem, as it indicates that the cryptocurrency is receiving significant interest. 

While incessant network outages have been a major talking point this week, the Solana memecoin rave and the flurry of activity surrounding the networks’ fourth anniversary have been more prominent.  

Also, a closer look at the chart shows that previous spikes in SOL social dominance in December 2023 and January 2024 have both led to significant price upswings. 

Solana price forecast: Rocky road to $250?

These critical market data points affirm the bullish outlook that SOL price could experience a major breakout towards $250, if the Solana keeps gaining investors’ mindshare  and the memes keep encroaching more market share.

At the time of writing on March 21, SOL price is nestled just above the $190 mark, having rebounded 9% within the daily timeframe. With the current prices far exceeding the 20-day Simple Moving Average (SMA), the bulls appear to be in control of the short-term momentum.

Solana memecoin sector now worth $6B: BONK, WIF investors driving SOL price to $250?  - 1
Solana (SOL) price forecast | March 2024 | Source: TradingView

However, the upper-limit of the Bollinger band indicator highlights that the Solana price rally could hit a major bump at the $209 area. But a decisive breakout above that sell-zone could see SOL price head towards $250 as predicted.

On the flip side if a downturn sets in, the 20-day SMA at $160 could the major support territory to watch. Given the rising demand for the SOL native memes, a bearish reversal below that range seems unlikely in the near-term.

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