SOL’s market cap slips amid bearish December

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Roughly a month ago, SOL set a new all-time high at $263. 

Since then, it’s been down-only for the asset, which retraced all the way below $190. 

The 25% slide knocked Solana down a couple of rungs on the cryptocurrency leaderboard. SOL is now the sixth-largest cryptoasset by market capitalization, trailing bitcoin, ethereum, tether, ripple and BNB. Some have pointed to the flashy new exchange Hyperliquid as a SOL competitor, but other market watchers say Solana is likely to keep running after a slight drawdown.

For context, all cryptos have had a rough week after the most recent FOMC meeting somehow left investors feeling bearish despite another rate cut .

Still, of all the major tokens experiencing a Santa slide, SOL showed “particular weakness,” FalconX head of research David Lawant wrote on Friday. Memecoins like SHIB and DOGE performed even worse, perhaps indicating that the more volatile the crypto, the harder it fell. While SOL is far from a memecoin, it is certainly higher-beta than BTC or ETH. That hasn’t stopped XRP and BNB from rallying past Solana however. 

Solana investors may partly be pricing in a $2.1 billion SOL token unlock that’s slated for March 1, 2025 and could put downward pressure on the asset if the unlocked tokens are sold. 

SOL’s price may also be struggling due to a newfound competitor in Hyperliquid peeling away some investors, Quai Network co-founder Alan Orwick said. Hyperliquid is a decentralized-ish layer-1 and crypto exchange focused on perpetual futures trading. Its HYPE token airdrop earlier this month was one of the largest in crypto history. HYPE is already the 25th-largest crypto token by market cap. 

Because Hyperliquid is very fast, some have started calling it a better version of speed-focused Solana — although its momentum has stalled somewhat in recent days amid speculation that North Korean hackers are plotting an exploit of the blockchain.

Orwick added that a pro-crypto Trump administration and potential SOL ETF approval could be bullish for the asset next year. 

Plus, there are always memecoins.

The launchpad and major driver of Solana onchain activity pump.fun “probably won’t get shut down by the Feds until 2028,” CFX Labs co-founder and CEO Nick Chicago said. “Wouldn’t be surprised to get major brands doing memes.”

Chicago was bullish for anecdotal reasons as well: His mother-in-law, who typically buys cryptos at the very top, “has not deployed yet.”

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