Solana (CRYPTO: SOL) dropped 1.4% in the past 24 hours, extending its losses over the previous seven days to 9.9%. Solana-based memecoins are particularly hard-hit by the correction, taking much heavier losses than established memecoins.
What Happened: Solana ecosystem memecoins have plummeted over the last week. Memecoins like Bonk (-24%), dogwifhat (-51.2%) and WOOF (-32%) saw particularly heavy losses. In comparison, Dogecoin (CRYPTO: DOGE) is down 12.6% while Shiba Inu (CRYPTO: SHIB) is down 11.6% over the same time frame.
Why Does It Matter: Hailed as this cycle's "Ethereum (CRYPTO: ETH) killer," Solana surged 71.9% in December alone. The rally sparked a frenzy of activity in the Solana ecosystem: Bonk was listed on Binance and Coinbase and named as the next big competitor to Dogecoin and Shiba Inu. The Solana Saga phone price exploded above $5,000, as gem hunters looked to cash in on the airdrops coming with the phone.
The Solana rally also led to high activity among on-chain traders and increased trading volumes. On-chain volumes peaked on Dec. 22, 2023, at $2.61 billion, a tenfold increase from the $246 million on Dec.2, 2023.
The recent correction in the Solana ecosystem follows a wave of profit-taking from investors looking to rotate their capital into other cryptocurrencies. Memecoin valuations consequently plummeted, particularly in comparison to more established rivals.
Cryptocurrency analyst Michaël van de Poppe explained on his X handle how this altcoin correction may be caused by the Bitcoin ETF buzz: "But is that going to stay? I don't think so, probably everything is skewed towards the approval of a Bitcoin ETF." He maintained that momentum is likely to come back to altcoins after the ETF frenzy has blown over.
Read Next: 'Ethereum Killer' Solana Plummets 12%, Max Keiser Says 'Rug Pull Has Begun'
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