Bitcoin Slumps 4%, Falling Below $70K; Solana Outperforms

Crypto markets experienced a burst of downside volatility Thursday with bitcoin (BTC) tumbling over 6% at one point to below $69,000. Repeating what's now a familiar pattern, buyers quickly stepped in, with prices rebounding to $70,500 by press time.

The largest crypto by market capitalization earlier Thursday hit a new record high just below $74,000, but started to decline at around the beginning of the U.S. trading session. The move accelerated in afternoon hours to as low as $68,600 before the dip-buying began.

Major altcoins ether (ETH), ripple (XRP), matic (MATIC) and avax (AVAX) also lost 5%-7% before retracing some of the losses.

Solana's native token (SOL) showed relative strength amid the market slump, notching its highest price in 26 months before the pullback. Still, SOL was slightly up 3% through the day, making it one of the best-performing assets in the CoinDesk 20 Index. which dropped 4%.

Digital asset hedge fund QCP Capital said in a Thursday market update that SOL has benefitted from capital rotation as bitcoin's rally seemingly ran to a halt.

Multiple analysts noted that BTC could enter a period of consolidation, even with a potential 20% correction in the cards, as the momentum that propelled to fresh record-highs in the past two weeks started to wane.

Read more: Beware of Bitcoin's 'Rising Wedge,' Chart Analyst Says

Crypto traders forecasted more gains for SOL targeting its all-time record prices from 2021, breaking above its last key resistance level after cooling off for two months.

Digital asset trader Jelle also noted that SOL is also benefiting from rising retail demand for trading Solana-based tokens such as dogwifhat (WIF), one of the meme coins that recently saw eye-watering advances. "SOL has broken all major levels standing in the way of new all-time highs," Jelle said in an X post. "New retail will flock to solana tokens, and buying SOL is their entry ticket."

Tristan Frizza, founder and CEO of Solana-based decentralized finance (DeFi) protocol Zeta Markets, noted increased network activity on Solana, with decentralized exchanges (DEX) consistently surpassing $2 billion in daily volume since early March.

"[Solana's] solid adoption metrics, which signal genuine user activity, suggest that we’re not only witnessing speculative interest but are also poised to see new all-time highs due to this authentic engagement," Frizza said in an email.

Recently, SOL changed hands at $165, some 35% lower than its 2021 November peak. Its market capitalization, however, is already approaching its $76 billion record due to the asset's expanding supply, also called token inflation.