- Activity on the Solana blockchain increased, but the price of SOL fell
- The correlation between SOL and BTC dropped as indicators showed that SOL could fall below $160
Unique Active Wallets (UAWs) on Solana [SOL] registered an incredible increase in the past 24 hours, according to DappRadar. Decentralized applications, including Jupiter, Raydium and Magic Eden, have contributed to the above-mentioned increase.
AMBCrypto found there were 307,100 UAWs on aggregator Jupiter Exchange, representing a 251% increase. For Raydium, it was up to 285,200, while NFT activity increased. Finally, the same rose by 178% on Magic Eden.
Memecoins drive SOL up and down
The increase in activity on Raydium and Jupiter could be linked to the increasing memecoin activity in the market. A research of platforms revealed that the buzzing memecoin story can be attributed to GameStop (GME) and legendary trader Keith Gill, popularly known as “Roaring Kitty.”
On June 7, derivative tokens linked to the trader appeared in large numbers. Furthermore, these Solana-based tokens have risen to staggering market caps within just short periods of time.
This increase also indicated an increase in demand for SOL. However, at the time of writing, Solana’s price was valued at $162.44, representing a decline of 5.44% in the past 24 hours.
Here it is also worth mentioning that AMBCrypto has found the reason why SOL could not sustain the increase despite an increase in demand.
For many degenerates, the idea of buying a memecoin is not sustainable for long. In crypto, a degenerate refers to a person who deals in trading highly volatile and speculative tokens with no fundamental characteristics. Therefore, when the tokens reach a certain profit level, they exchange them for Solana’s native token and sell them for a stablecoin or fiat.
There has been a plethora of such pumps and dumps lately, and this may not stop anytime soon. If this were the case, SOL could continue to move sideways.
Can the token bank use BTC?
AMBCrypto also found that one-day volatility for SOL increased. Volatility tracks how quickly the price can fluctuate. Therefore, if selling pressure rises amid the high volatility, the token could crash into the charts.
On the other hand, an increase in buying pressure accompanied by high volatility could trigger a price breakout. However, it appears that the SOL could fall below $160 in the near term.
Solana decouples from Bitcoin
Another factor that can influence the price is Bitcoin [BTC]. According to data from Santiment, Solana’s correlation has been declining since June 6, indicating that the respective price does not always move in the same direction.
Therefore, if BTC rises above $71,000 again, there is no guarantee that SOL would revisit $187. However, if the market recovery spreads more widely, prices could follow a similar path.
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Whichever way SOL goes, the cryptocurrency is unlikely to reach $200 in the coming week. There are predictions that the SOL could reach $1,000 in the long term. To achieve this, market conditions must improve.