Solana Takes a 6% Nosedive—Here’s What’s Rattling the ’Ethereum Killer’
Solana’s native token SOL got smacked with a 6% sell-off over the past 24 hours—another reminder that crypto ’blue chips’ aren’t immune to volatility. Traders are pointing to three culprits:
1. Macro headwinds: Bitcoin wobbled below $70K, dragging altcoins down in its wake. Thanks for nothing, BTC.
2. Network congestion fears: Memecoin traders flooded Solana again, sparking fresh PTSD from last month’s transaction failures.
3. Profit-taking: SOL still boasts a 90% YTD gain—plenty of bagholders decided to cash in before the next ’up only’ delusion wears off.
Meanwhile, Ethereum maximalists are (predictably) tweeting ’I told you so’ while ignoring their own chain’s 15% gas fees. Crypto tribalism: the only reliable bull market.
Liquidations, unstaking drives Solana down
A spike in liquidations has a strong effect on volatility. Specifically, liquidations increase the supply of tokens in circulation, which can put downward pressure on their price. In this context, Solana’s pullback is aligned with the broader market trend.
Still, many traders are anticipating the start of an altcoin season, which could benefit Solana. For instance, BitMEX co-founder Arthur Hayes believes that the altcoin season may start when bitcoin reaches $110,000. This will likely prompt many investors to convert their Bitcoin gains into even bigger potential gains with altcoins.
At the same time, Solana is also seeing some positive signals. For instance, the recently approved 2X Solana ETF saw $30 million in inflows since its launch in February. This suggests that the likely approval of spot Solana ETFs in the U.S. has the potential to serve as a future price catalyst, especially as ETFs make it easier for some investors to gain exposure to crypto tokens.
