Memecoin Craze Drives Solana Price Surge: Is $180 SOL on the Horizon?

A notable increase in activity on the Solana network, combined with the impressive performance of various memecoins, has propelled the price of Solana’s native token, SOL, towards the $180 mark. Over the week from October 11 to October 18, SOL experienced a gain of 12.1%, reaching a current price of $154.87. This upward momentum has been partly attributed to the rising demand for memecoins, which leads to increased network volumes, fees, and total value locked (TVL).

Traders are now questioning the sustainability of this memecoin frenzy and how it might continue to impact SOL's price amidst heightened network activity.

Despite lacking strong fundamentals, the demand for memecoins is evident, often fueled by influential social media figures. For instance, a post by pwnlord69 on October 12 sparked a surge in interest for the memecoin Goatseus Maximus (GOAT), which quickly reached a market value of $400 million based on rumors about an AI bot. In reality, the bot only promoted the GOAT token, which was launched through Pump.fun, a decentralized application that manages technical aspects and liquidity for Solana tokens on the Raydium exchange.

In addition to GOAT, several other memecoins on the Solana network have experienced remarkable price surges in October, with SPX6900 (SPX) increasing by 379%, Apu Apustaja (APU) rising 170%, and FWOG gaining 134%. Other notable tokens, such as PUPS and MAGA (TRUMP), also recorded gains exceeding 90%, according to data from Cryptorank.io. As these memecoins gain traction, they attract further attention on social media, creating a self-reinforcing cycle.

Solana’s Network Activity Supports Higher SOL Prices

A critical question remains: how significantly does this memecoin movement affect SOL’s price, and how does Solana's network performance stack up against its competitors? One key metric in this analysis is total value locked (TVL), which represents the total funds deposited in the network’s smart contracts.

Recently, Solana’s total deposits surged to a two-year high of nearly 41 million SOL, marking a 13% increase month-over-month. In contrast, Ethereum's TVL has remained flat at 17.7 million ETH, while BNB Chain’s TVL stagnated at 7.9 million BNB. Notable highlights within Solana’s ecosystem include Raydium, which saw a 70% increase in deposits over the past month, and Sanctum, which gained 32% in TVL.

While measuring deposits is crucial, understanding SOL demand requires analyzing on-chain activity as well. For example, a decentralized exchange (DEX) can show high trading volumes without necessarily indicating significant TVL. In this context, Solana has recently outperformed its competitors, securing its position as a leader in on-chain activity. Solana recorded a 43% weekly growth in DEX volumes, eclipsing even Ethereum’s performance, with Arbitrum's weekly volume reaching $3.74 billion—64% below Solana’s impressive $11.16 billion.

Predicting whether the memecoin surge will last is challenging, but the data suggests that reaching $180 for SOL is feasible. With its high validator capacity and competitive edge, Solana appears well-positioned to capitalize on growth in various sectors, including artificial intelligence, Web3 applications, gaming, and prediction markets.