Crypto markets saw a burst of downward volatility on Thursday, with Bitcoin (BTC) plunging over 6% at one point to below $69,000. Buyers quickly intervened and prices rose back to $70,500 at press time.
The largest cryptocurrency by market capitalization hit a new record high of just under $74,000 early Thursday, but began falling around the start of the U.S. trading session. The move accelerated as high as $68,600 in the afternoon hours before dip buying began.
Major altcoins Ether (ETH), Ripple (XRP), matic (MATIC) and Avax (AVAX) also lost 5-7% before recovering some of the losses.
Solana’s native token (SOL) showed relative strength amid the market slump, reaching its highest price in 26 months before the decline. Still, SOL rose slightly by 3% during the day, making it one of the best-performing assets in the CoinDesk 20 Index. which fell by 4%.
QCP Capital, a digital asset hedge fund, said in a market update on Thursday that SOL has benefited from capital rotation as Bitcoin's rally appears to have stalled.
Several analysts noted that BTC could enter a period of consolidation even with a possible 20% correction on the horizon, as the momentum that led to new record highs over the past two weeks began to fade.
Crypto traders predicted further gains for SOL, targeting its all-time record prices from 2021 and breaking its last key resistance level after a two-month slowdown.
Digital asset trader Jelle also noted that SOL is also benefiting from increasing retail demand for trading Solana-based tokens such as Dogwifhat (WIF), one of the meme coins that has recently seen stunning gains. “SOL has broken through all key levels standing in the way of new all-time highs,” Jelle said in an X post. “New retailers will flock to Solana tokens, and buying SOL is their ticket to entry.”
Tristan Frizza, founder and CEO of Solana-based decentralized finance (DeFi) protocol Zeta Markets, noted increased network activity on Solana, with daily volume on decentralized exchanges (DEX) consistently exceeding $2 billion since early March.
“[Solana’s] Solid adoption metrics that signal real user activity indicate that we will not only see speculative interest, but also experience new all-time highs based on this authentic engagement,” Frizza said in an email.
Recently, SOL changed hands at $165, about 35% below its November 2021 peak. However, its market cap is already approaching a record $76 billion due to the growing supply of the asset, also known as token inflation.
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