Solana Has Seen A Smaller Decline In Hot Capital Than Bitcoin & Ethereum

The on-chain analytics firm Glassnode has revealed how Solana has recently shown more resilience than Bitcoin and Ethereum in this indicator.

On-chain analytics firm Glassnode has highlighted Solana’s recent resilience compared to Bitcoin and Ethereum in a key indicator.

Solana Witnesses Smaller Hot Capital Decline than Bitcoin & Ethereum

In a recent post on Substack, Glassnode analyzed the performance of leading cryptocurrencies in terms of Hot Capital during the recent market downturn.

The “Hot Capital” metric tracks the recent capital flows for an asset. It combines the Realized Cap of two coin age ranges, 24 hours and 1 day to 1 week, to calculate its value.

The Realized Cap is an on-chain capitalization model that assumes the ‘true’ value of any token in circulation is equal to the spot price at which it was last transacted on the blockchain.

This indicator essentially represents the total amount of capital that the investors on the network as a whole have used to purchase their coins (as opposed to the usual market cap, which signifies the value the holders are carrying in the present).

Hence, the Realized Cap of the youngest age bands (24 hours and 1 day to 1 week) provides insight into the amount of capital that recently flowed into the cryptocurrency.

The following chart displays the trend in Hot Capital for Ethereum over the past year:

According to the chart above, Ethereum’s Hot Capital (black curve) spiked to a high level in December, indicating a substantial amount of fresh capital was flowing into the asset. However, the metric has since plunged significantly.

Compared to the December peak, the demand for new ETH has dropped by over 52%. Bitcoin also witnessed a similar pattern, with the number one cryptocurrency even seeing a larger drop of 77%. “Momentum has cooled sharply since December peaks,” Glassnode notes.

Interestingly, while the top two coins have experienced this significant cooldown, Solana has shown a different trend, as evident in the chart below:

In December, Solana’s aggregated Realized Cap of the 24-hour and 1-day to 1-week age bands stood at $15.8 billion. Demand has cooled for the coin as well since then, but with the metric today sitting at around $11.8 billion, the difference is of just 25%. Clearly, SOL has shown more resilience than BTC and ETH during this period.

It now remains to be seen whether this will ultimately be reflected in Solana’s price.

SOL Price

At the time of writing, Solana is trading around $172, down more than 12% over the last week.