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The price of a memecoin drawing its namesake from Elon Musk’s artificial intelligence project “Grok” plummeted over 70% after blockchain sleuth ZachXBT alleged the token’s social media account was recycled from a scam token project.

In a Nov. 13 X (formerly Twitter) post, ZachXBT shared screenshots showing various social media accounts and websites tied to the Grok (GROK) token were repurposed from old projects, including an abandoned memecoin project called ANDY, which has significantly declined from its all-time high.

In the five hours following ZachXBT’s post, memecoin enthusiasts watched as GROK plunged 74% from its all-time high of $0.027 to as low as $0.007. Its price has since retracted to $0.011, per DexTools data.

GROK’s price plunged more than 70% in five hours following ZachXBT’s allegations. Source: DexTools

In a follow-up post, ZachXBT pointed to an Etherscan transaction showing GROK’s team sent roughly $1.7 million worth of the token to a burn address in a bid to reduce supply and restore confidence in the token.

The Grok developer burned 90 million GROK tokens after the token’s price plummeted. Source: Etherscan

The X account for the GROK token claimed in a Nov. 14 post that the development team had burned all of the tokens from the deployer address, some 180 million GROK worth roughly $2 million at current prices.

Solana’s native token, SOL (SOL), experienced a remarkable 58.6% surge in just five days, reaching a $64 high on Nov. 11. However, the subsequent two-day retracement of 11.3% to $54 has prompted investors to question whether this signals a fading bullish momentum or merely a temporary price adjustment.

To put SOL’s performance into context, it can be compared with other leading altcoins. Since its peak on Nov. 11, Avalanche’s AVAX (AVAX) has rallied by 17%, Ether (ETH) gained 1%, and BNB (BNB) traded down 2%. This comparison underscores that SOL has underperformed in the broader altcoin market. Therefore, the 5.5% daily decline on Nov. 13 is unlikely to be tied to macroeconomic or sector drivers, such as the potential approval of a spot BTC exchange-traded fund.

Solana remains a top contender in terms of performance and on-chain activity

Despite the recent decline in SOL’s price, a seven-day gain of 35% suggests that investors should not hastily adopt a bearish outlook, as this could merely be a natural correction following Solana’s significant outperformance. However, it’s essential not to disregard Solana network’s fundamentals, which include on-chain metrics and SOL’s derivatives markets. Excessive leverage use by traders could potentially lead to forced liquidations, especially in perpetual contracts or inverse swaps, where funding rates play a crucial role.

Perpetual contracts, also known as inverse swaps, carry an embedded rate that is typically charged every eight hours. A positive funding rate indicates that longs (buyers) are seeking more leverage, while the opposite situation arises when shorts (sellers) require additional leverage, leading to a negative funding rate.

7-day funding rates at top exchanges. Source: CoinGlass

The seven-day funding rate for SOL aligns with that of Bitcoin (BTC) and ETH, pointing to a slightly higher demand for leverage longs. The 0.4% weekly cost is standard, considering that cryptocurrency’s market capitalization has grown by 10.5% over the past two weeks, reaching $1.4 trillion, its highest level since May 2022.

Bitcoin (BTC) has risen more than 120% year-to-date, indicating that the crypto sentiment has improved significantly. Solid buying has resulted in a sharp increase in crypto wallets holding more than $1 million in Bitcoin this year from 23,795 on Jan. 1 to 81,925 currently, according to BitInfoCharts data.

After the substantial rally, Bitcoin could face headwinds in the near term as investors digest the macroeconomic data and events due this week. The Consumer Price Index data is set to be released on Nov. 14, followed by the Producer Price Index data on Nov. 15, and the Nov. 17 deadline to avoid a partial United States government shutdown could give rise to short-term volatility.

Daily cryptocurrency market performance. Source: Coin360

A short-term pullback is healthy for the long-term trend of the market. It is also likely to be viewed as a buying opportunity by traders as most analysts anticipate Bitcoin to rally in 2024, buoyed by the expectations of a spot Bitcoin exchange-traded fund finally receiving regulatory approval.

Will Bitcoin and select altcoins start a short-term correction, or will the bulls maintain their buy pressure and clear the respective overhead resistance levels? Let’s analyze the charts to find out.

S&P 500 Index price analysis

The S&P 500 Index (SPX) snapped back from the neckline on Nov. 9, indicating that the bulls are buying on every minor dip.

Bitcoin (BTC) institutional investment vehicles have seen over $1 billion in new inflows in less than two months.

In its latest weekly report on Nov. 13, crypto asset management firm CoinShares furthered the narrative that Bitcoin and altcoins are again attracting capital.

Crypto institutional product AUM up 99% year-to-date

Bitcoin, Ether (ETH) and some major altcoins are enjoying price gains as excitement over the possible approval of the United States’ first spot exchange-traded fund (ETF) grows.

Since November 2022, the total crypto market cap has increased by $600 billion, data from TradingView confirms.

Total crypto market cap 1-week chart. Source: TradingView

The past two months, however, have seen a precipitous increase in funds being deployed to crypto investment products, CoinShares reveals.