Solana Falls to Eighth by Market Cap After Being Overtaken by Ripple’s XRP
The cryptocurrency market is wobbling after a decline that began late last week. Most tokens and cryptocurrencies suffered heavy losses, with some dropping as much as 40% since Friday.
Bitcoin, often called the “king” of crypto, lost nearly 3% in the past 24 hours and is struggling to stay above $34,000. Ether (ETH) and Cardano (ADA) experienced larger declines, each falling more than 6.5% during the day.
Why Solana’s Price Took the Biggest Hit
Altcoins also endured significant losses during the latest wave of selling. In particular, Solana recorded one of the largest red candles on both daily and weekly charts, down 11.08% in the last 24 hours and nearly 40% over the past seven days.
In recent weeks, major banking institutions, including Bank of America and JPMorgan, positioned the Solana blockchain as a viable rival to Ethereum. Despite rising popularity and adoption, the network has also faced growing complaints and criticism.
Outages and other network problems left traders, investors, and community members frustrated. Most recently, the proof-of-stake blockchain experienced another congestion event that prevented DeFi users from managing their positions on Friday and Saturday.
Solana became clogged by a flood of duplicate transactions that slowed the network. The outage led to unplanned liquidations for DeFi users who could not top up loan collateral. According to Solana founder Anatoly Yakovenko, many of the transactions appeared to have been initiated by bots.
XRP Overtakes Solana as Market Cap Halves in Three Weeks
The Solana network remained offline for much of Friday and Saturday. Market analysts believe the disruption damaged the price of SOL, Solana’s native token.
Ripple’s native cryptocurrency benefited from Solana’s slowdown and surpassed Solana in market capitalization rankings. Solana’s market capitalization has fallen by more than half since the start of the year.
On January 1, Solana’s circulating market cap was roughly $53 billion; at the time of writing, it had declined to about $25.8 billion. CoinMarketCap data also indicates that Solana’s latest market cap level has not been this low since late August.
In a series of tweets addressing the network instability, Solana’s engineering team said it was working to fully resolve the issue and prevent congestion-related problems. The team pledged several improvements over the next two to three months aimed at strengthening the blockchain’s performance.