Solana, the ninth largest cryptocurrency by market capitalization, has been on an uptrend recently, rising more than 35% in the past three weeks.
So what triggers this rally? According to crypto analytics firm Santiment, there are several factors that could contribute to Solana’s momentum. One of them is the increased social volume on Reddit, where Solana fans are expressing their optimism and confidence in the project.
Santiment noted that a Reddit post titled “Solana is still standing” coincided with a spike in price earlier today.
Another possible factor is speculation around Solana’s NFT ecosystem, which is home to many popular collections including Degenerate Ape Academy, SolPunks, and Solana Monkey Business. A recent study by Flipside Crypto showed that some Solana NFT communities are more speculative than others, meaning that there are more traders than coin holders.
But not everything is rosy for Solana. The coin has seen a decline in trading volume, social dominance and development activity since its peak in late 2021.
Santiment pointed out that Solana’s funding rate (which measures the cost of borrowing to trade with leverage) on Binance and DyDx was low for most of June, suggesting there wasn’t much short selling pressure to push the price higher. What’s more, Solana’s development activity, once a leading indicator of innovation and growth, has been questioned by a report claiming it has been artificially inflated by spam commits on GitHub.
*Not investment advice.
