Solana, one of the prominent cryptocurrencies in the market, recently took a dip, facing a notable 5% decline that caught the attention of investors. The reason? Worries about FTX’s plan to sell off assets. But just as quickly as it fell, Solana bounced back, hinting at a potential liquidation of about $125 million in short positions.
Read more about it below.
Market Movement: Solana’s Drop and Rise
According to CoinGlass data, over the past month, Solana’s SOL saw a significant 40% decrease in open interest (OI), dropping to $1.78 billion on May 9. Such a big drop in OI often signals caution among traders, who hesitate to take big steps in the crypto market.
Despite the uncertainty, Solana has shown resilience, bouncing back from drops and shaking up existing short positions. For example, on April 19, Solana fell 5% but quickly recovered to $157, right before Bitcoin’s halving event.
If Solana can regain its May 7 price of $157 with a 5% climb, it could trigger the liquidation of a massive $125 million in short positions, injecting volatility into the market.
What’s Causing the Price Dip?
The recent drop in Solana’s price can be linked directly to FTX’s announcement of plans to sell assets to compensate victims of its collapse. Since Solana holds a significant share of these assets, the announcement shook investor confidence.
Market Mood Has Shifted
Adding to the mix, the Fear and Greed Index recently dropped by 13 points over 24 hours, reaching a score of 55 on May 9. Such shifts in sentiment undoubtedly influence Solana’s short-term trajectory.
Meanwhile, rumors in the crypto world suggest Solana could challenge Ethereum’s dominance in transaction fees. Recent reports hint at Solana potentially surpassing Ethereum in this area, influencing Solana’s recent price movements and painting a positive picture for its future.
Solana Price Analysis
As of now, Solana is priced at $143.81, showing a modest 2.5% decrease over 24 hours. Despite this dip, Solana’s market capitalization has risen to an impressive $64 billion, highlighting its resilience and solid position in the crypto landscape.
Also Check Out: Crypto Trading Volume Plunges After 7-Month Surge, Bitcoin’s Winning Streak Snapped
Do you think Solana can overcome the recent market jitters and maintain its upward trajectory?
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