The gloomy sentiment that has gripped crypto markets in recent days showed no signs of abating on Tuesday, as the price of bitcoin (BTC) slid below the psychologically significant $94,000 level, marking a fresh multi-month low. The largest cryptocurrency by market cap was trading around $93,600 by early afternoon, reflecting a 2% drop on the day and a 10% decline over the past week.
The broader digital asset space didn’t fare much better, with the CoinDesk 20 Index, which tracks 20 of the largest cryptocurrencies, shedding 4% in the past 24 hours. Dragging on the index was an especially steep 16% plunge in solana (SOL), as the fallout continued from the weekend’s scandalous LIBRA token rugpull that has entangled key Solana figures and Argentina’s President Javier Milei in fraud allegations. Solana’s monthly losses now stand at 35%, fully retracing its post-Trump election gains.
Analyst: Path to $500K Bitcoin Still Clear
However, amid the near-term price weakness, one prominent bitcoin bull is doubling down on his long-term conviction. In a note to clients on Tuesday morning, Standard Chartered’s Geoff Kendrick reiterated his view that bitcoin is on track to surpass $500,000 by the end of Donald Trump’s presidential term.
Brushing off the current slump as noise, Kendrick pointed to an encouraging pattern in recent regulatory filings on institutional ownership of bitcoin ETFs. Sifting through the latest batch of 13F disclosures, Kendrick observed a “broadening of the base of buyers,” progressing from early retail adopters to more deep-pocketed players like hedge funds and now banks and even sovereign wealth funds.
“Going forward, we would expect more very long-term-long-only money to buy bitcoin and would expect the Abu Dhabi position to be the start of much greater participation by sovereigns.”
– Geoff Kendrick, Standard Chartered Bank
The note highlighted increased bitcoin ETF stakes from institutional giants like Goldman Sachs as well as a first-time purchase by Abu Dhabi’s sovereign wealth fund as catalysts that could draw more slow-moving, large-scale capital off the sidelines and into the bitcoin market.
Solana Reckoning
Meanwhile, the meltdown in solana accelerated on Tuesday, ensnaring the ecosystem’s key DeFi protocols and metaverse tokens. Decentralized exchanges built on Solana like Raydium (RAY) and Jupiter (JUP) saw their tokens plummet by double-digits, while Solana-based liquid staking provider Jito’s JTO token slid 7%. All are now down over 30% from their Friday highs.
The collateral damage across the solana landscape stems from the implosion of the LIBRA memecoin, which rocketed to a $4 billion fully diluted valuation after a Twitter endorsement by Argentina’s President Javier Milei, only to crater 99% as insiders dumped $100 million. Milei has since backpedaled, deleted his tweet, and now faces fraud charges and calls for impeachment, while Solana DEX Meteora’s co-founder Ben Chow resigned due to his involvement with the token launch.
“This is the latest sordid episode emanating from Solana’s memecoin complex.”
– Alex Thorn, head of firmwide research, Galaxy Digital
As if that weren’t enough to spook skittish SOL holders, a looming token unlock event threatens to flood the market with up to 15.7 million SOL worth around $2.5 billion at current prices. While details remain murky, a sizable portion is believed to come from tokens held by the FTX bankruptcy estate.
Summing up the bleak near-term outlook for SOL, research group Tokenomist warned, “Historical examples of large token unlocks have often led to heightened price volatility.”
