The Reason for the Increase in Solana (SOL) Price Today

Today's rise in SOL's value can be attributed to increased network activity and the robust performance of memecoins built on the Solana platform.

Source: aybarsdorman.medium.com

Currently, Solana's price surge is linked to a modest recovery in the broader cryptocurrency market. SOL's upward movement mirrors Bitcoin's momentum following a softer-than-expected CPI reading for May. Data indicates that SOL's price sits at $159, marking a 5% increase over the last 24 hours and a remarkable 36% climb from its recent low of about $118, recorded over five weeks ago. This smart contract token has demonstrated strong performance in recent months, boasting an 88% rise over the past six months and a 56% increase year-to-date. With a market capitalization of $73 billion, SOL maintains its position as the fifth-largest cryptocurrency by market value.

Solana-Based Memecoins Are Witnessing a Recovery

The recent rally in Solana (SOL) on June 12 aligns with a concurrent resurgence in the prices of memecoins built on its network. Many of these memecoins are experiencing significant gains, with several posting double-digit increases. For example, Dogwifhat (WIF), the primary Solana memecoin by market capitalization, has surged by over 12.7% within a 24-hour adjusted timeframe. Similarly, other prominent memecoins like Bonk (BONK), Popcat (POPCAT), and Myro (MYRO) have seen increases of 14%, 12%, and 16%, respectively, within the same period. This frenzy surrounding memecoins coincides with a rise in on-chain activity within the Solana ecosystem, as indicated by data from the Dune Analytics dashboard pump.fun.

The surge in SOL's price today is preceded by a notable increase in the number of transactions executed on the network. According to data, daily transactions on the Solana blockchain rose from 11,629 to 16,450 between June 4 and June 10. The influx of memecoins on the Solana platform suggests heightened network activity and increasing adoption. With more user engagement, there's a corresponding uptick in transactions and network usage, thereby boosting demand for SOL and propelling its price upward.

Metrics for Solana Derivatives Suggest the Possibility of Further Upside Potential

Despite recent price declines in the broader cryptocurrency market, demand for leverage via SOL futures has remained resilient. Perpetual contracts, such as inverse swaps, feature an embedded rate that, when positive, indicates heightened demand for leverage among long (buy) positions. Conversely, a negative funding rate suggests a requirement for more leverage among short (sell) positions. Data reveals that SOL's funding rate has risen from 0.0054% to 0.01% per eight hours between June 11 and June 12, equivalent to approximately 0.2% per week. This surge in demand, following a 5% increase in SOL's price, signals positive market sentiment.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.