Solana's BONK Dips 13% Post-Memecoin Madness: A Profit-Taking Move

• Solana Ecosystem Observes Downtrend Amid Profit-taking Activity
• High Trading Volumes on Solana-based DEX Applications
• The Solana Ecosystem Boom
• Solana Outperforms in On-Chain Trading
• Value Increase of Solana Applications

Solana Ecosystem Observes Downtrend Amid Profit-taking Activity

The allure of the Solana$104 5.03% ecosystem seemed to fade this week as native tokens from key projects experienced a slump following multiple weeks of bullish trends. This trend suggests that early investors maybe capitalising on their profits. Coingecko data reveals that Meme coin bonk (BONK) plunged by 13% in the last 24 hours. Similarly, other coins have observed a drop: dogwifhat (WIF) fell by 15% and the smaller but hyped token analos (ANALOS) witnessed a massive drop of over 50%. Tokens of distributed exchange Orca (ORCA) dipped by 9%, while those of Jito's JTO - a governance token - descended by 6%. The Solana token prices also dipped by approximately 4% before bouncing back, leading to futures traders suffering a loss of around $13 million due to liquidations in the last 24 hours.

High Trading Volumes on Solana-based DEX Applications

In spite of the pullbacks, trading volumes on Solana-based decentralized exchange (DEX) applications remained robust. Tokens worth $1.44 billion changed hands in the past day alone. This resulted in Solana accounting for 26% of all DEX trading volumes across the crypto space. These figures surpassed the usual favourites such as Ethereum$2,315 -2.42%, Arbitrum, and BNB$312 -5.65% Chain. Solana DEX volumes have been gradually capturing a larger share of the total market.

The Solana Ecosystem Boom

The Solana ecosystem witnessed a boom at the beginning of this month, catalysed by the bonk tokens commencing a multiweek run that led to an increase of more than 1,000%. This also led to the token being listed on prominent exchanges like Binance and Coinbase. The network witnessed a spike in activity, driving the prices of Solana's Saga phone to over $5,000, a significant jump from its inability to sell out as recent as October. Solana's SOL market capitalization quickly surpassed other large tokens.

Solana Outperforms in On-Chain Trading

Last week's metrics indicate that Solana significantly outperformed other platforms in on-chain trading, experiencing higher trading volumes and network fees compared to Ethereum, usually the market leader. The blockchain's fast transactions, low fees, and a flurry of meme coin issuances likely led to the network's revival since early December, pushing SOL token prices to nearly $120 from $38 at the start of November.

Value Increase of Solana Applications

The value locked on Solana applications saw a significant increase, from the $400 million mark in November to $1.3 billion worth of tokens, matching levels previously seen in July 2022. However, the rapid turnover on small-cap tokens seems to have attracted a plethora of new memecoin issuances. Many of these only last a few days before experiencing a drop as steep as 90%. Rug pulls, where a developer removes liquidity from a token they issued, appear to be prevalent as of Wednesday, as per data from Birdeye.

Edited by Jonathan Stoker