As an experienced analyst, I’ve seen my fair share of market fluctuations and price declines in the cryptocurrency world. The recent 5% drop in Solana (SOL) within a day, amidst growing FTX sell-off concerns, has once again put traders on edge. With over $125 million at risk if SOL were to bounce back as it has in the past, uncertainty is high.
Solana (SOL) experienced a 5% decrease in value within a 24-hour period, fueled by renewed worries surrounding FTX. Current market positions indicate potential losses of approximately $125 million should Solana rebound as it did in the past.
Over the past 30 days, Solana has experienced a price drop, accompanied by a significant decrease of approximately 40% in its open interest (OI), bringing the total down to around $1.78 billion as of May 9, based on CoinGlass’s latest data.
When the Open Interest (OI) for a cryptocurrency significantly drops, it often indicates that traders hold reservations about the asset’s price direction and prefer to abstain from entering new positions.
As a researcher studying the cryptocurrency market, I’ve observed that Solana has a tendency to bounce back strongly after experiencing dips. Currently, this trait poses a potential risk for investors holding around one hundred million dollars worth of short positions on this digital asset.
In the last thirty days, Solana’s price has experienced fluctuations where it dropped and then rebounded by 5% or more during the same day.
On the 19th of April, Solana experienced a decline of approximately 5%, but bounced back to $157 by the hour, barely missing the Bitcoin halving event on the 20th of the same month.
If the price of Solana rises by 5% to hit its May 7 level of $157, approximately $125 million worth of short positions will need to be covered.
A few days prior to Solana’s price decline on May 7, the anonymous cryptocurrency trader known as CryptoAce warned his 13,400 Twitter followers that Solana’s price was trapped within a resistance zone. He correctly forecasted that this resistance would result in a reversal, causing the price to fall towards $142.50.
The recent decline in Solana’s price could be linked to FTX’s announcement on the same day that they had sufficient funds to reimburse victims of their exchange failure, with a significant portion of these funds coming from Solana sales.
I’ve observed a decline in the overall crypto market mood, reflected in a drop of 13 points in the Fear and Greed Index, leaving it at a level of 54 as of May 9.
The recent advancements in the battle between Solana and Ethereum could potentially influence its price in the immediate future as well.
On May 8th, according to CryptoMoon’s report, there were allegations that the Solana network might surpass Ethereum’s transaction fees. This potential development could serve as a bullish sign for Solana, potentially leading to an increase in its price.
On May 7th, the total worth of Solana stood at approximately $2.8 million, not far from Ethereum’s value of around $3.1 million.
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2024-05-09 09:29