Solana (SOL) Drops in Market Cap, Falls Behind BNB
Just days after usurping BNB, SOL reluctantly relinquishes its top 3 position in the market capitalization rankings.
Solana (SOL) has pulled back below the $100 mark after a fervent climb last week. The meme coin frenzy has cooled off, and even the allure of Bonk airdrops no longer garners the same attention as before.
In the past 24 hours, SOL has seen declines approaching 10%, steadily distancing itself from its April 2022 peak of $125. At the time of writing, SOL is trading around $104.
1-hour chart of SOL/USDT trading pair on Binance. Screenshot taken at 11:30 AM on December 29, 2023.
Not limited to SOL alone, approximately $144 million in Long positions were liquidated today, based on CoinGlass data.
Amount of derivatives assets liquidated in the past 24 hours. Source: CoinGlass
Last week, Solana-based meme coins like BONK and WIF were often among the top gainers, but this week they've plummeted by over 50% from their monthly highs. This indicates investors are profit-taking and shifting into stablecoins to tame the volatility of these meme coins.
In contrast to SOL's significant correction, rival BNB has capitalized on the opportunity to showcase its strength. BNB's native token has reclaimed its position in the market cap rankings, a spot recently taken by SOL for a few days. Nonetheless, SOL remains firmly in the top 5, a position it wrestled from XRP on December 21.
Top 6 based on market capitalization. CoinMarketCap screenshot at 11:30 AM on December 29, 2023.
Overall, Solana has been one of the top-performing cryptocurrencies in 2023. Compared to January this year, SOL has surged over 958%, starting from $10 and emerging as a phoenix rising from the ashes of losses in 2022.
A deep correction is crucial for SOL at this juncture to curb unsustainable growth momentum, exacerbated by excessive leverage in derivative positions, noted David Shuttleworth from Anagram.
Shuttleworth emphasized that on-chain data indicates traders are withdrawing capital from SOL and reducing exposure to the token.
