BONK Falls 13% as Solana Ecosystem Sees Profit Taking After Memecoin Frenzy

The Solana ecosystem allure seemed to lull this week as native tokens from major projects by market capitalization snapped down from multiweek bull runs hinting at profit-taking from early investors.

Data from Coingecko shows meme coin bonk (BONK) fell 13% in the past 24 hours, dogwifhat (WIF) dropped 15%, while smaller but hyped token analos (ANALOS) dropped over 50%.

Tokens of decentralized exchange Orca (ORCA) slid 9%, while Jito’s JTO – a governance token – dropped 6%. SOL prices slumped approximately 4% before recovering, with futures traders taking on $13 million in losses in liquidations the past 24 hours.

Pullbacks were likely a sign of profit-taking from early investors in these projects, who probably made significant returns on their initial positions as prices jumped.

Meanwhile, trading volumes on Solana-based decentralized exchange (DEX) applications remained high, with tokens worth $1.44 billion changing hands in the past 24 hours. That accounted for 26% of all DEX trading volumes across the crypto space, higher than usual players Ethereum, Arbitrum and BNB Chain.

The Solana ecosystem boomed early this month as bonk tokens started a multiweek run of over 1,000%, grabbing listings on influential exchanges Binance and Coinbase.

That seemingly kickstarted activity on the network, with prices of Solana’s Saga phone flying to over $5,000 – despite being unable to sell out as recently as October – and SOL market capitalization quickly flipping other large tokens.

Solana also became the strongest draw among on-chain traders, metrics from last week show, with trading volumes and network fees crossing those of Ethereum – usually the highest – on a seven-day rolling basis.

Hype for the blockchain’s speedy transactions, cheap fees, and a lottery of meme coin issuances seemingly jumpstarted the network since early December, pushing SOL token prices to nearly $120 from $38 at the start of November.

Value locked on Solana applications grew in tandem, rising to $1.3 billion worth of tokens from the $400 million mark in November to reach levels previously seen in July 2022.

But the quick flips on small-cap tokens seemed to have attracted hoards of new memecoin issuances, most of which last just a few days before falling as much as 90%.

Rug pulls, a term for a developer erasing liquidity from a token they issued, seem to run rampant as of Wednesday, data from Birdeye shows.