Why is Solana (SOL) price up today?

SOL’s value increased today as a result of a positive governance vote for Solana validators and the outstanding performance of Solana-based memecoins.

Solana’s price of $169 has risen by more than 4.80% in the last 24 hours, reaching an intraday high of roughly $173 on May 29. After its recent rally, the cryptocurrency is expected to recoup 35-40% by the end of the month, its highest since December 2023.

Several reasons have contributed to the recent increase in SOL’s value. Among these are a favourable governance vote for Solana validators and the outstanding performance of Solana-based memecoins. Let’s go over these bullish catalysts in depth.

Solana’s validator governance vote

On May 27, the Solana community agreed to allocate 100% of priority fees to network validators, ensuring that they are suitably compensated for their role in preserving the network’s safety and efficiency.

Validators are vital for confirming transactions and ensuring the blockchain’s integrity. Higher incentives may encourage more validators to join and remain in the network, hence increasing its overall reliability and resilience.

Traders see these gains as evidence of a robust and resilient network, which encourages more investment and risky trading. This feeling has pushed the SOL price up by about 6.5% since the vote, as shown below.

Solana-based memecoins are exploding

Solana’s price increase today corresponds with a continuous rise in the network’s memecoins. For example, Dogwifhat (WIF), the top Solana memecoin by market capitalization, has increased by more than 21% in a 24-hour adjusted timeframe. Similarly, other major memecoins, such as Bonk (BONK), BOOK OF MEME (BOME), and Popcat (POPCAT), have increased by 14-15% over the same time period.This memecoin fever is accompanied by an increase in deployed transactions and earnings across the Solana ecosystem, according to statistics from the Dune Analytics dashboard pump.fun. 

Today’s SOL price increase, in particular, comes before a strong jump in the aforementioned measures, as shown below.The Solana network’s expansion comes after a report revealed that the majority of new projects launching on its blockchain were memecoins. As a result, the total value locked (TVL) in the Solana ecosystem has increased dramatically by 2024.The influx of new tokens, particularly memecoins, on Solana reflects increased activity and platform popularity. More coin releases often result in greater transactions and network traffic, which drives demand for SOL and explains why the Solana price is rising today.

SOL price technical setup highlights more upside

Today’s SOL price gains are due to a strong buying mentality at a support confluence formed by the 50-day exponential moving average (50-day EMA; the red wave on the chart below) and the 0.236 Fibonacci retracement level. This support confluence also occurs near SOL’s multi-month ascending trendline, which has been limiting the cryptocurrency’s negative attempts since December 2023. Together, these support levels may push SOL’s price to rally towards the 0.0 Fib level in June, which is about $206.50.In contrast, a definitive break below the support confluence and the ascending trendline could push SOL’s price down to the 0.382 Fib line at roughly $133 in June, a 22.75% drop from current levels.