Memecoin trading activity on Solana has been on the rise, closely following Bitcoin’s recovery. Data from Blockworks reveals that the average daily trading volume for memecoins on Solana increased by 46% between April and May. As of May 21, the monthly trading volume for memecoins on Solana stood at $58.7 billion, surpassing the volume recorded in April by over $1 billion.
Notably, memecoins accounted for 64.6% of all monthly trading volume on Solana as of May 21, a significant increase from 56% in April. The surge in memecoin activity coincided with Bitcoin breaching the $100,000 mark on May 8, reaching nearly $4.2 billion in daily trading volume – the highest since February 15.
The performance of memecoins in the crypto sector has been impressive, with a 59% increase in the past month, making it the fifth-best-performing sector among 22, according to Artemis data.
Despite the boosted trading volume, there seems to be a lack of confidence in the market. Weekly volumes have shown consistent growth since Bitcoin’s low on April 7, with memecoin weekly trading activity increasing by an average of 16% as of the week ending May 18. Between May 12 and May 18, Solana-based memecoins recorded nearly $24 billion in weekly volumes, the highest level since February 16.
Interestingly, memecoins represented 61.5% of all volume traded on Solana in the last week of April, the highest proportion since February 16. However, investor confidence took a hit following an incident in February when the market crashed after Argentinian president Javier Milei endorsed the LIBRA memecoin as a means to fund small ventures in the country. The token’s market cap reached $4.5 billion but plummeted by 95% shortly after Milei’s mention, leading to rumors of insider activity on Solana’s token launches.
This incident has left a lingering impact on investor confidence, which has yet to fully recover to pre-incident levels. As the memecoin market continues to evolve, it will be interesting to see how trading activity on Solana and other platforms adapts to changing dynamics and investor sentiment.
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