Is Memecoin’s Crazy Solana Price Rally – $180 SOL The Next Stop?

Solana's native token SOL (SOL) gained 12.1% from October 11th to October 18th, and the data suggests that the upward momentum is partly driven by demand for memecoins. Increased demand translates into higher network volumes, fees and total value locked (TVL).

Traders are now debating whether the memecoin craze is sustainable and how the price of SOL can benefit from the surge in network activity.

While there is no fundamental basis for the rising demand for memecoins, it is clear that influential social media is driving traders' attention to the tokens. Take this October 12 post from pwnlord69 for example.

The memecoin Goatseus Maximus (GOAT) has hit a $400 million market cap in just one week, sparking rumors that an artificial intelligence bot is about to launch. In fact, the bot only promoted the GOAT token, a decentralized application launched using Pump.fun that manages the technical aspects and liquidity of the Solana token on the Raydium exchange.

Several other memecoins on the Solana network saw significant price increases in October, with SPX6900 (SPX) gaining 379%, Apu Apustaja (APU) gaining 170%, and FWOG gaining 134%. According to Cryptorank.io data, more than 90% of known hits are recorded by PUPS and MAGA (TRUMP). As these memecoins gain value, they attract more attention from social networks and media, creating a positive feedback loop.

Solana network activity supports higher SOL value

However, the main question is whether this move has a significant impact on SOL's value and how the network has fared compared to its competitors. A critical metric for this analysis is Total Value Locked (TVL), which measures the total amount invested in the network's smart contracts.

Solana's total deposits recently hit a two-year high of nearly SOL 41 million, a 13 percent month-on-month increase. In comparison, Ethereum's TVL remained flat at 17.7 million ETH (ETH), while BNB Chain's TVL stood at 7.9 million BNB (BNB). Highlights on the Solana network include Radium, which saw a 70% increase in deposits in the last 30 days, and Sanctum, which gained 32% on TVL.

Measuring deposits is important, but onchain activity must be analyzed to accurately measure SOL demand. A decentralized exchange (DEX), for example, can register large volumes without necessarily having a TVL. In this context, Solana's impressive network activity overtook Ethereum last week and confirmed its leadership position recently.

Solana's 43% weekly growth in DEX volumes stands out among its direct competitors. Notably, even Ethereum's layer-2 solutions, which benefit from low transaction fees, could not match Solana's performance. Arbitrum, for example, grossed $3.74 billion weekly, still 64 percent below Solana's $11.16 billion.

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While it is difficult to predict whether the memecoin boom will continue, the data suggests that SOL reaching $180 is plausible given the level of competition given the network's high verifier capacity. All in all, Solana appears to be well positioned to capture growth in areas such as artificial intelligence infrastructure, Web3 applications, gaming, prediction markets, and more.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.