SnapX Degen Digest: December 25, 2024
Explore Solana's struggles after meme coin mania, $OM's incredible 250x rise, and key trends shaping the crypto market in this week’s Degen Digest.
Dec 25, 2024
TL;DR
- Solana’s meme coin rally fizzled out as Pump.fun’s revenue peaked and market sentiment shifted, leading to a significant downtrend in the SOL/BTC ratio.
- Two potential catalysts for Solana’s recovery: a new market narrative or the approval of a Solana Spot ETF in early 2025.
- $OM stands out as the only 250x altcoin on major CEXs in 2023-2024, benefiting from the RWA meta and strategic mainnet tokenomics changes.
- Concerns linger over $OM’s inflated market cap and declining TVL despite its strong price resilience in a bull market.
- Key takeaway: Watch for ETF news, unlock events, and shifting market trends to stay ahead of the curve.
Degen Digest: SnapX Weekly Crypto Research Report Vol. 2
Welcome to this week’s Degen Digest, where we dive into critical crypto market trends, analyze key tokens, and provide actionable insights for retail and institutional investors alike. This week's focus is on Solana’s (SOL) recent struggles amidst meme coin mania and the remarkable rise of OM, the only 250x altcoin that emerged from major centralized exchanges (CEXs) in 2023-2024.
Solana’s Decline: Meme Coin Mania Reaches Its Limit
Recent analysis from blockchain dashboard Dune Analytics reveals that Pump.fun, a popular Solana-based platform, saw its daily revenue fees peak on November 23 before entering a downward spiral. The meteoric rise of Solana this year was largely attributed to the explosive growth of meme coins launched on platforms like Pump.fun. This surge was fueled by aggressive buying behavior from market participants.
.png%3Ftable%3Dblock%26id%3Db7642fbf-d0fe-43bc-8a24-b4bda7483eb7%26cache%3Dv2&w=3840&q=75)
However, as of late November, Pump.fun faced backlash due to the rise of controversial token deployers engaging in extreme behavior during live-streamed events. This led the platform to restrict its streaming features, culminating in a ban by the United Kingdom on December 6.
As anticipated by many traders, this marked a local top for Solana’s meme coin market. The SOL/BTC chart highlights Solana’s all-time high of $264.4 on November 22, after which it began underperforming relative to other cryptocurrencies.
Although a few standout projects on Solana’s decentralized exchanges (DEXs) have continued to generate trading opportunities, most SOL-related altcoins on CEXs have experienced losses of over 50% from their peak valuations. This indicates a significant shift in market sentiment away from meme coins.
Two Scenarios for Solana’s Price Recovery
Despite its recent struggles, there are two potential scenarios that could spark a bullish reversal for Solana (SOL):
- A New Market Narrative or Meta:
A fresh trend or meta that compels traders to buy SOL could reignite interest. This could include the return of meme coin mania or other innovative use cases for Solana.
- Approval of a Solana Spot ETF:
.png%3Ftable%3Dblock%26id%3D7c843e01-9b00-455a-bd44-ba6e52f3d164%26cache%3Dv2&w=3840&q=75)
While the chances of approval remain slim, there are five financial institutions submitting proposals for a Solana ETF, with key deadlines looming in January 2025. Historical precedents, such as the ETH/BTC ratio surge following ETF-related news, suggest that even a rejection with positive commentary could boost the SOL/BTC ratio.
$OM: The 250x Altcoin Breaking CEX Norms
In recent years, the crypto community has shifted toward DEX trading due to the lack of high-multiplying opportunities on CEXs. Many CEX-listed altcoins now launch with high market capitalizations and fully diluted valuations (FDVs), leading to downward price trends.
However, $OM stands out as the only altcoin to achieve a 268x increase on a major CEX, rising from $0.0172 to $4.63. Let’s examine how $OM pulled off this feat.
.png%3Ftable%3Dblock%26id%3Dda190eaa-f716-4792-9a37-75c2e29b94e3%26cache%3Dv2&w=3840&q=75)
$OM and the RWA Meta
Initially dismissed as a typical pump-and-dump low-cap altcoin, $OM began its rise in March 2024, benefiting from the broader Real World Asset (RWA) meta. On March 19, BlackRock announced its significant investment into ONDO, a token within the RWA sector. This news fueled a rally across all RWA tokens, pushing $OM to $1.40.
While most RWA tokens experienced severe corrections, $OM stood out by maintaining its price levels.
The Mainnet Tokenomics Shift
On February 21, MANTRA DAO announced a proposal to transition $OM to its own mainnet. The proposal passed with overwhelming support (99.63%), introducing a new mainnet token allocation:
- 888,888,888 ERC-20 $OM tokens (90% already in circulation).
- An additional 888,888,888 mainnet $OM tokens, mostly controlled by the project foundation.
.png%3Ftable%3Dblock%26id%3D3c73c387-83d0-4fa8-bd4a-cdd3bfc355e0%26cache%3Dv2&w=3840&q=75)
Despite doubling its token supply, $OM saw a mega pump from $1.36 to $4.50 after its mainnet launch on October 23, defying the usual downward pressure from unlock events.
Concerns Over $OM’s Future
However, $OM’s current market cap of $3.59B raises questions, especially compared to $ONDO, which has a market cap of $2.3B backed by BlackRock. Additionally, $OM’s Total Value Locked (TVL) has dropped to $13.34M from its $16.7M peak in November 2021, according to DefiLlama.
With a bull market underway, the sustainability of $OM’s valuation remains uncertain. The involvement of market makers suggests they may be maintaining $OM’s price artificially, potentially to offload team allocations in the future.
Key Takeaways
- For Solana Maxis:
Focus on ETF-related news and monitor new market trends that could drive renewed interest in SOL.
- For Altcoin Traders:
Keep an eye on unlock schedules for tokens like $TIA and $OM, as these events often provide insights into market conditions.
- For Market Observers:
The RWA meta continues to gain traction, but caution is advised when evaluating tokens with inflated market caps and declining TVL.
Explore More on SnapX
- Learn how to analyze crypto market sentiment with the tools and strategies in our Beginner’s Guide to Sentiment Analysis.
- Discover the fundamentals of on-chain analytics to enhance your trading strategy in our Onchain Analytics Guide.
- Stay safe while trading by understanding the security features of CEXs and DEXs.
Conclusion:
The crypto market is constantly evolving, and staying informed is key to maximizing your trading opportunities. Whether you’re tracking Solana’s recovery potential, diving into the RWA meta, or navigating altcoin unlock dynamics, SnapX is here to provide you with the tools and insights to succeed.
Subscribe to the SnapX Blog for more weekly updates and expert analysis.
Share article
Subscribe to our newsletter.