Meme coin frenzy benefits Solana and XRP, giving wings to altcoin season

Ripple (XRP) and Solana (SOL) gained 400% and 40% in the past 30 days, capturing the attention of crypto traders. As Bitcoin’s (BTC) dominance declines, it kicks off a period where altcoins outperform BTC consistently for 90 days, the altcoin season. 

XRPLedger-based meme coins like XRP God Candle (XGC), XRP Army (ARMY), The Dark Side of XRPL (VADER), Bull (BULL) and Solana-based Dogwifhat (WIF), Bonk (BONK), Popcat (POPCAT), Peanut the Squirrel (PNUT) and Cat in a dogs world (MEW) have paved way for the altcoin season. 

On-chain metrics support the gains in XRP and Solana prices this week. 

XRP and Solana meme coins contribute to rising volume 

XRP and Solana meme coins have gained popularity in the past week. Newly launched meme coins on the XRPLedger, traded on Magnetic X –a decentralized exchange platform– have locked between 79,000 and 146,000 XRP in total value on their chains. 

Solana-based meme coins crossed $20.42 billion in market capitalization on Wednesday, per CoinGecko data. 

As meme coins boost activity in both XRP and Solana ecosystems, Santiment records the recent spike in volume this week. 

The total number of XRP holders climbed by nearly 1.5% in the past 30 days and the metric shows consistent growth, observed in the chart below. 

XRP total number of holders, volume (SOL) and (XRP) | Source: Santiment

Open interest and funding rates support XRP and Solana gains

Open Interest (OI) in a token represents the liquidity and interest in a particular token across derivatives exchanges and helps predict price moves in the spot market. The OI in XRP and SOL noted a spike this week and stay above average levels.

Price gains in XRP and SOL, alongside rising open interest, is considered a sign of bullish sentiment among traders. 

Total open interest in USD (SOL) and (XRP) | Source: Santiment

Total funding rates are used to ascertain whether derivatives traders are bullish or bearish on a token. Positive funding rates are indicative of optimism and a bearish sentiment. XRP and SOL’s total funding rates throughout the last three weeks of November are positive, supporting the price gain in the tokens. 

XRP and SOL total funding rates | Source: Santiment

XRP price prediction

XRP price could revisit its January 2018 peak of $3.40 before entering price discovery. For a price discovery target, XRP’s rally from the November low of $0.5046 to the December 3 peak of $2.9444. 

XRP is 33.33% away from its January 2018 peak. The 161.80% Fibonacci retracement of the rally sets $4.4523 as the price discovery target for XRP this cycle. 

The Moving Average Convergence Divergence (MACD) indicator supports a bullish thesis as the indicator flashes green histogram bars above the neutral line. 

The Relative Strength Index (RSI) shows XRP is overvalued and traders consider this a sell signal. Before adding to their position, XRP traders need to keep their eyes peeled for any sign of correction in the altcoin. 

XRP/USDT daily price chart | Source: Tradingview

If there is a correction in XRP, the 50% Fibonacci retracement at $1.7245 could act as support for the altcoin. 

Solana price prediction

Solana could find support at the 61.8% and 50% Fibonacci retracement of its rally from the August low of $110 to the all-time high of $264.39. The two key support levels are $205.41 and $187.20 respectively. 

Technical indicators point to a correction in Solana in the short term. RSI is sloping downward and close to neutral and MACD flashes red histogram bars under the neutral line. 

Traders need to watch the momentum indicators for signs of a trend reversal. If the consolidation ends and Solana resumes its climb, SOL could enter price discovery and rally towards $359.80, the 161.80% Fibonacci retracement level. 

SOL/USDT daily price chart | Source: Tradingview

XRP’s correlation coefficient with Bitcoin is 0.80 and Solana’s is 0.99. 

Since both altcoins remain correlated with Bitcoin, a correction in BTC could result in a decline in these tokens. Bitcoin’s rally to $100,000 and beyond could make or break the price trend for both altcoins.