In recent events, Solana (SOL) has relinquished its status as the fourth-largest cryptocurrency by market capitalization, with Binance Coin (BNB) surging ahead. Despite a remarkable 120% monthly rally in December, which catapulted Solana’s market cap above Binance’s BNB, the cryptocurrency experienced a price drop following Christmas.
Solana’s SOL token, which reached an all-time high of $123 on December 26, has now dipped below the $100 mark, currently trading at $105. Simultaneously, BNB has witnessed an unexpected 9% uptick in its price, allowing it to reclaim its position as the fourth-largest cryptocurrency by market cap, with a value of $319.
Solana’s price volatility
The recent volatility in Solana’s price has been a subject of interest for cryptocurrency enthusiasts and investors. Despite the impressive rally in December, Solana experienced a retracement that saw its price fall below $100, followed by a brief period at just above $101. This downturn in Solana’s price, representing a 14% decrease from its yearly high, has raised questions about the sustainability of its earlier gains.
Solana’s December impacted its price and cascaded effect on SOL-based memecoins. Examples include Bonk (BONK) and Dogwifhat (WIF), which witnessed incredible price action between November 22 and December 22, posting gains of 650% and a staggering 123,000%, respectively.
However, in a parallel move to Solana’s retracement, both memecoins have since retraced, with declines exceeding 50% from their all-time highs. Interestingly, this decline started three days before Solana’s yearly high on December 26, raising questions about the interconnectedness of these assets.
Trading activity on the Solana network
One of the significant outcomes of Solana’s price surge was a substantial influx of trading activity on the Solana network. For a brief period, trading volumes on SOL-based decentralized exchanges (DEXs) even eclipsed those on the Ethereum network, marking a notable milestone.
However, as of now, Solana DEX volume has cooled off, amounting to $1.1 billion in the last 24 hours, approximately half of Ethereum’s $2 billion trading volume during the same period, as per DefiLlama data.
Ethereum’s resurgence
While Solana’s rise and subsequent retracement have garnered significant attention, Ethereum (ETH) has moved in the cryptocurrency market. Ethereum recently posted a 5% weekly gain, attracting the interest of traders and analysts who speculate that it might be gearing up to outperform its competitors. With Ethereum’s current price at $2,368, it remains a strong contender in the crypto space.
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