Solana Meme Coin Dominance on Display as SHROOM Provides Massive Gains

• A meme coin trader bought 292.16 million SHROOM and made $8.9 million in gains.
• The 4-hour price analysis showed that SOL might drop to the $149.20 local support.
• The MFI indicated that SOL neared the oversold region, and a bounce could happen soon.

Within one hour, a trader made a mind-blowing $8.9 million trading SHROOM, one of Solana’s (SOL) memecoins. According to Lookonchain, the traders spent 6,000 SOL to buy 292.16 million SHROOM.

An hour later, the trader sold the SHROOM for $9.93 million, making the profits above in the process.

Meme Coin Season Continues

SHROOM is one of the many meme coins that have recently emerged on the Solana blockchain. In recent articles, Coin Edition made mention of BOOK OF MEMES (BOME), which gave incredible gains to buyers after it hit a $1 billion market cap.

At press time, DEXScreeener showed that SHROOM’s price increased by 579% in the last 24 hours. However, its market cap, despite hitting $60 million at one point, had retraced. As of this writing, the market cap was $34.2 million.

However, the increasing deployment of meme coins has not been able to save SOL from decreasing. Previously, the token had attempted to hit $200. But on March 18, bears rejected the attempt as the price decreased by 4.29% in the last 24 hours.

SOL Price Analysis

On the 4-hour chart, SOL painted a bearish picture that saw bulls lose control of the $177.97 support. On March 18, bulls attempted a breakout that could have led SOL toward $250.

But it was rejected. Furthermore, resistance at $195.65 ensured that the attempt was completely invalidated.  Currently, bears have ensured bulls have no say in the cryptocurrency’s direction.

As such, a reversal might not occur anytime soon. Should this condition linger, the price of SOL might decline to the local support level of $149.20.

Further examination of the chart showed that liquidity has continued to flow out of Solana. This inference was obtained from the Money Flow Index (MFI). At press time, the MFI reading was 27.48.

This reading confirmed the increase in selling pressure over buying. However, the MFI can also tell when a cryptocurrency is overbought or oversold. If it hits 80, then the asset is overbought. On the other hand, a reading of 20 implies an oversold condition. 

In SOL’s case, increased selling pressure could drive the MFI downward. However, if the indicator hits 20.00, the price of the token might reverse upwards. 

Meanwhile, the Awesome Oscillator (AO) indicated that a rebound was not likely until SOL further declined. With a negative reading, the AO showed that the momentum might not continue to decrease and the price could slide below $150. However, in the mid-term, the value of SOL could eventually drive through to $250.