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The cryptocurrency market experienced a sudden downturn on Thursday, with Bitcoin (BTC) plunging over 6% at one point and slipping below $69,000 and Solana Steals the Show. This follows a now-familiar pattern where a price correction is quickly met by buyers stepping in to stabilize the market. By the time the article was written, Bitcoin had rebounded to $70,500.
Earlier that day, Bitcoin reached a new record high just below $74,000. However, the price began to decline at the start of the US trading session. This decline accelerated in the afternoon, reaching a low of $68,600 before buyers intervened.
Altcoins Follow Suit, But Solana Shines
Major altcoins, including Ethereum (ETH), Ripple (XRP), MATIC (MATIC), and Avalanche (AVAX), also experienced losses of 5% to 7%. However, they managed to recoup some of these losses later in the day.
Solana (SOL), the native token of the Solana blockchain, displayed relative strength during the market slump. SOL reached its highest price in 26 months before the pullback. Even after the correction, SOL remained up 3% for the day, making it one of the best performers in the CoinDesk 20 Index, which fell by 4%.
Solana’s Rise Attributed to Capital Rotation
Digital asset hedge fund QCP Capital attributes SOL’s gains to capital rotation as Bitcoin’s rally appears to be stalling. Several analysts believe Bitcoin could enter a consolidation period, with a potential 20% correction on the horizon, as the momentum that propelled it to record highs in the past two weeks starts to fade.
Solana Poised for Record Highs?
Crypto traders are predicting further gains for SOL, targeting its all-time highs from 2021. SOL recently surpassed a key resistance level after a two-month cool-off period.
Analyst sentiment suggests that SOL is well-positioned to break new ground. Technical analyst Bob Loukas tweeted, “$SOL now based and fueled up for leg to $250.”
$SOL now based and fuel up for leg to $250. https://t.co/nIpcbScR4j pic.twitter.com/IP1CidZfyw
— Bob Loukas 🗽 (@BobLoukas) March 13, 2024
Digital asset trader Jelle noted that SOL is benefiting from rising retail demand for trading Solana-based tokens, such as Dogwifhat (WIF), a meme coin that recently experienced significant gains. “SOL has broken all major levels standing in the way of new all-time highs,” Jelle stated in a post. “New retail will flock to Solana tokens, and buying SOL is their entry ticket.”
Solana’s Strong Fundamentals
Tristan Frizza, founder and CEO of Solana-based DeFi protocol Zeta Markets, highlighted the increased network activity on Solana. Decentralized exchanges (DEXs) on the Solana blockchain have consistently surpassed $2 billion in daily volume since early March.
“Solana’s solid adoption metrics, which signal genuine user activity, suggest that we’re not only witnessing speculative interest but are also poised to see new all-time highs due to this authentic engagement,” Frizza said in an email.
While SOL is currently trading at $165, which is 35% lower than its November 2021 peak, its market capitalization is already approaching its record of $76 billion due to the token’s expanding supply.
Conclusion
Bitcoin’s recent price correction serves as a reminder of the cryptocurrency market’s volatility. However, Solana’s strong performance amid the downturn highlights its potential for further growth. With rising user activity, increasing adoption, and a supportive trading environment, SOL appears well-positioned to challenge its all-time highs in the near future.
