• The price of Solana (SOL) has increased by over 5% in the past 24 hours due to an uptick in memecoin trading activity on its network
• Solana’s DeFi ecosystem is experiencing growth, evident in its lending, liquid staking, and perpetual markets
• Ether’s implied volatility is higher than Bitcoin’s, indicating traders anticipate increased price fluctuations for Ether, possibly due to the upcoming launch of spot Ether exchange-traded funds (ETFs)
The price of Solana has increased by over 5% in the past 24 hours after an uptick in the network’s meme coin trading activity, according to analysts.
Zeta Markets Founder Tristan Frizza said Solana’s continued price rise recently remains propelled by memecoin trading on its network. “Memecoins have certainly become a significant driver of activity on Solana. Beyond speculation, this showcases Solana’s ability to handle high transaction volumes with low fees, making it the perfect environment for retail users,” Frizza told The Block.
To illustrate this, Frizza pointed to on-chain metrics like Solana’s total value locked (TVL) surpassing $49 billion. This indicates robust network activity. The number of active users has also been constantly growing, with monthly active addresses hitting 4.165 million in May, a new all-time high.
Solana has gained over 5% in the past 24 hours and is now trading at $174.83 at the time of writing, according to The Block’s Price Page.
Growth in DeFi Ecosystem Boosts Solana
According to this week’s Bitfinex Alpha report, the Solana DeFi ecosystem is experiencing growth, evident in its lending, liquid staking and perpetual markets.
“This resurgence in Solana is attributable to the advantages it offers over other blockchains in terms of transactions per second, throughput and scalability. Both Solana and Ethereum continue to grow, but the rise in Solana is notable,” Bitfinex analysts said.
They added that despite the fact that by TVL Solana is four places behind Ethereum, it is second in terms of decentralized exchange volumes by chain as more users find utility in its blockchain.
Ether’s Implied Volatility Outpaces Bitcoin’s
At the top of the cryptocurrency market cap rankings, ether is expected to experience larger price fluctuations this month compared to bitcoin.
According to QCP Capital analysts, ether options implied volatility (IV) is currently higher than that for bitcoin, indicating that traders anticipate increased price fluctuations for ether, possibly in response to the upcoming launch of spot ether exchange-traded funds (ETFs).
“Bullishness is likely to continue as the market waits for the spot ether ETF to usher in new demand, with the options market certainly reflecting this with ether vols (IV) still trading 15% over bitcoin vols,” QCP Capital analysts said.
Block Scholes Head of Research Andrew Melville observed that ether’s price fluctuations have become more significant since mid-May than bitcoin’s. This highlights the largest disparity in volatility between both tokens since the FTX collapse in November 2022.
Conclusion
The heightened premium assigned to volatility reflects increased uncertainty, particularly in the short term, with potential updates to ether ETF applications looming. However, unlike the recent rally, there’s not as much demand for ether’s price to go higher quickly. Overall, the market sentiment appears cautiously optimistic, with similar short-term positioning between both ether and bitcoin.
