Solana ($SOL) has continued its rally over the past 24 hours despite a downturn in the broader cryptocurrency market.
According to data from CryptoCompare, currently (as of 7:10 p.m. UTC on March 14), SOL is trading at around $163.77, up 1.24% in the past 24-hour period. Meanwhile, Bitcoin ($BTC) and Ethereum ($ETH) are trading at $70,184 (down 4.47%) and $3,809 (down 4.92%) respectively.
Why is the crypto market market down? Well, that is probably due to the same reason that the U.S. stock market is down today.
According to a press release issued by the U.S. Department of Labor Statistics earlier today, the Producer Price Index (PPI) for final demand experienced a notable increase of 0.6 percent in February, following a more modest 0.3 percent rise in January and a slight decrease of 0.1 percent in December 2023. This adjustment, made on a seasonally adjusted basis, highlights a significant momentum in the index, culminating in a 1.6 percent year-over-year increase by February’s end. This marks the most substantial annual growth observed since the 1.8 percent uptick recorded for the year ending in September 2023.
The detailed analysis for February reveals that the increase in the PPI was primarily driven by a 1.2 percent surge in the prices of final demand goods, accounting for about two-thirds of the overall rise. Additionally, the services sector saw a growth of 0.3 percent. When examining the index excluding foods, energy, and trade services, there was a 0.4 percent increase in February, a slight deceleration from January’s 0.6 percent rise. Over the twelve months leading up to February, this more refined measure of the PPI advanced by 2.8 percent, underscoring a persistent inflationary trend in core sectors of the economy.
As of 3:23 p.m. EDT on March 14, all four major U.S. stock indices are down:
There are probably two reasons for Solana’s display of strength today.
First, although Bitcoin is trading near its all-time high of $73,737, which was reached earlier today, Solana is down 36.9% from its all-time high (recorded on 6 November 2021), and so in some people’s eyes its rally should continue for a while longer, and that is why some crypto traders have been rolling their profits from BTC and ETH into SOL.
Second, Solana’s fast and cheap blockchain and rich set of decentralized exchanges almost invite degenerate gamblers to the highly risky (but potentially lucrative) activity that is trading Solana meme tokens, quite a few of which have enjoyed spectacular gains over the past few months. All of this trading activity has helped to increase demand for Solana and pushed up the price of SOL.
For instance, Dogwifhat ($WIF), which is trading at $3.04 at the time of writing, is up 15.6% in the past 24-hour period and more interestingly up nearly 700% in the past 30-day period.
And comments from some crypto influencers, such as the one below from former BitMEX CEO Arthur Hayes, fuel the frenzy around Solana meme tokens:
Featured Image via Dogwifhat
