Altcoins have lost more than $200 billion in market capitalization, according to AMBCrypto, underscoring a sharp reversal in sentiment for the asset class. On Binance, over 70% of altcoins have broken below their 200-day moving average (MA), and that share is approaching 80%.
Solana (SOL) was trading at $89 at press time, with its 200-day MA at $97.76, leaving the token about 9.75% below the key technical level and indicating bearish control.
Macro Headwinds Weigh on Risk Assets
The broader altcoin market's weakness has been accelerated by macroeconomic uncertainty. In particular, President Trump's Republicans lost control of the two chambers of the U.S. Congress. Additionally, the Federal Reserve, European Central Bank, and Bank of England raised interest rates this week, discouraging borrowing capital that would be used to invest in risk-on assets like altcoins.
Both the Nasdaq and the S&P 500 fell from their latest peaks, reinforcing broader weakness in the stock market as well.
The discrepancy between current altcoin performance and that of mid-August highlights a shift in market bias. Between August and September, the market cap of altcoins rose by $320 billion. Since then, it has shed 62.5% of that gain.
Solana's Tokenized RWA Market Approaches $4.8B
Despite the sharp drop in altcoin market caps, adoption on Solana has been thriving. The market cap of tokenized real-world assets (RWAs) on the chain hit a new peak of $4.80 billion.
At the time of writing, tokenized funds led with $3.70 billion, followed by tokenized stocks at $1.10 billion and commodities at $31.90 million, according to Token Terminal data cited by AMBCrypto.
These figures are expected to grow in the long term. Armani Ferrante, CEO of Backpack, one of the tokenizing platforms built on Solana, stressed opening up the entire global stock market on the Solana mainnet. However, regulations remain a major hurdle, especially in the United States after Republicans lost control of both the House and the Senate.
Will SOL Outperform a Weak Altcoin Market?
Solana slid after the midterm elections' outcome, exerting pressure on the altcoin. Even so, traders are betting on the growing RWA market to help mitigate downside risk, suggesting SOL could be an outlier when the general altcoin market is weak. Bitcoin would also need to be bullish for more confluence.
- Altcoins have lost over $200 billion in market cap, more than 62.5% of the gains recorded between mid-August and September.
- Solana's RWA market cap grew to $4.80 billion, led by tokenized funds.
