SOL Market Cap Declines as December Sees Bearish Trends
Roughly a month ago, SOL reached a new all-time high of $263. Since then, its price has decreased, falling below $190.
This 25% decline has positioned Solana as the sixth-largest cryptocurrency by market capitalization, following bitcoin, ethereum, tether, ripple, and BNB. While some view the new exchange Hyperliquid as competition for SOL, others believe Solana will recover after this temporary dip.
All cryptocurrencies faced challenges following the recent FOMC meeting, which left investors feeling bearish despite a rate cut.
According to FalconX head of research David Lawant, SOL displayed particular weakness during this downturn. Memecoins like SHIB and DOGE performed worse, suggesting that higher volatility correlates with greater declines. Despite this, XRP and BNB have surpassed Solana in performance.
Investor sentiment may also reflect concerns over a $2.1 billion SOL token unlock scheduled for March 1, 2025, which could exert downward pressure if unlocked tokens are sold.
Additionally, Hyperliquid, a decentralized layer-1 and crypto exchange focused on perpetual futures trading, may be attracting some SOL investors. Its HYPE token airdrop was one of the largest in crypto history, and HYPE is now the 25th-largest crypto token by market cap.
Hyperliquid’s speed has led some to label it a superior version of Solana, although concerns about potential exploits by North Korean hackers have affected its momentum.
Orwick noted that favorable political developments and potential SOL ETF approvals could positively impact the asset next year. He also mentioned that the launchpad pump.fun is likely to continue driving Solana's on-chain activity without regulatory intervention until 2028.
CFX Labs co-founder Nick Chicago expressed optimism based on anecdotal evidence, noting that his mother-in-law, who typically buys at market peaks, has not yet invested.