Solana's SOL Dips Under $100, Slides Behind BNB in Crypto Hierarchy

• Solana Experiences a Decline Following Previous Weeks' Hype
• Effects on Long Positions and Meme Tokens
• The BNB Smart Chain Thrives Amid Solana's Drop
• Understanding the Decline of Solana's SOL
• SOL's Anticipated Short-Term Pullback
• Traders Shift Capital Out of SOL

Solana Experiences a Decline Following Previous Weeks' Hype

On Thursday, Solana$104 5.03% (SOL) saw a decrease of nearly 6% over the past 24 hours, bringing the price down to $98. This decline follows weeks of high activity within the Solana ecosystem and a rally of Solana-based meme coins, which now appear to be losing momentum.

Following this recent drop, SOL has seen a total reduction of more than 20% from its Monday high of $125, marking the greatest price since April 2022 according to data from CoinDesk. At the time of writing, SOL has recovered slightly and is now trading just above $100.

Effects on Long Positions and Meme Tokens

Over the last three days, around $32 million worth of long leveraged positions - predictions of price increases - have been liquidated. This is due to trading platforms closing trades forcefully in response to insufficient margin, which has further sped up the pullback. This information is supported by data from CoinGlass.

In addition, Solana-based meme tokens such as BONK and WIF, which experienced significant growth earlier this month, have fallen by more than 50% from their all-time high in December. This suggests that individuals are taking profits and interest in the frenzy is dwindling.

The BNB Smart Chain Thrives Amid Solana's Drop

Contrary to SOL's decline, the native token of the BNB$312 -5.65% Smart Chain (BNB) surged by 9% in the past 24 hours, reclaiming its fourth position in the crypto market capitalisation ranking from Solana.

Understanding the Decline of Solana's SOL

Solana is recognized as one of the highest performing cryptocurrencies of 2023 with a rally of 900% from roughly $10 in early January. This massive increase reenergized its ecosystem after it was greatly impacted during the bear market.

SOL's Anticipated Short-Term Pullback

Despite this impressive performance, a short-term pullback was inevitable. This was due to signs of overheating indicated by elevated fund rates for derivative positions, as noted by David Shuttleworth, a research partner at Anagram, during a digital interview.

Traders Shift Capital Out of SOL

Trading data indicates that traders have begun transferring capital from SOL to stablecoins. This reflects a trend of locking in profits or decreasing exposure to the token, according to Shuttleworth. He added, There was a quick rebalancing against long positions, with many caught out of position and overleveraged.

Edited by Jonathan Stoker