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Solana price hit a 35-day peak of $170 on May 17, up 44% for the month, but spikes in SOL trading activity suggests more upside could follow in the days ahead.
Solana Spikes 22% as GameStop Triggers Memecoin Mania
Solana has emerged the best performing asset in the top 10 crypto market ranking this week. As the GameStop saga resurfaced, triggering a surge in memecoin demand, investors swooped in to scoop up prominent Solana-hosted memes like Dogwifhat (WIF) and BONK.
This surge in native memecoin demand has inadvertently led to increased demand for SOL.
Solana price has surged 22% since the GameStop rally broke out on May 14. At the time of writing on May 17, Solana is exchanging hands for $168.9 reflecting a 44% uptick for the month.
However, a closer look at the WIF (39.5%) and BONK (+26%) daily price charts shows that Solana’s top 2 largest meme projects have also scored significant double-digit gains in May 2024.
SOL Trading Volume Spikes $2.7 Billion amid Memecoin Mania
Notably, in recent months, periods of heightened memecoin demand have often triggered considerable SOL price surge, as it essentially boosts Solana network activity. And this bullish phenomenon appears to have reared its head again this week.
Santiment’s Trading Volume chart below records the dollar value of all transactions involving SOL during a 24-hour period.
As seen above, Solana trading volume reached a monthly low of 936.5 million on May 12. But since the start of the week, Solana has witnessed a considerable uptick in trading activity.
Further intensified by the GameStop inspired memecoin rave, Solana trading volume has already crossed the $3.61 billiion mark at midday on May 17. This reflects a remarkable $2.7 billion surge in trading volume between May 12 and May 17.
When trading activity surges during a market rally, it often drives prices further upward for two main reasons. First, the increased market liquidity allows early profit-takers to exit without derailing the rally.
More so, the higher trading volumes is a prime indicator of fresh capital inflows and increasing investor participation. All of these factors could combine to drive Solana price further upwards in the days ahead.
SOL Price Forecast: $200 Target on the Horizon
Solana price has gained bullish momentum this month, soaring 44% from $126 to a 35-day peak of $170 on May 17. The $2.7 billion surge in trading volume this week suggests Solana price is now set for another breakout towards the $200 in the days ahead.
However, looking at the daily price chart, the $180 area is a critical short-term resistance level to watch. With SOL having broken above the upper-limit Bollinger band indicator, bulls appear to be in firm control of the market momentum.
If the bulls keep up the heightened trading volumes, Solana price will likely advance above $180 and head towards the $200 milestone as predicted.
But on the downside, the bears could regain foothold in the market if price tumbles below $140. However, as depicted by the 20-day SMA indicator, the bulls will likely regroup around the $146 level to prevent such a major price reversal.