Cryptocurrencies

Solana Stock Drops 5% on New FTX Plan, Quick Rebound to Clear $125M Short Trades

Solana Stock Drops 5% on New FTX Plan, Quick Rebound to Clear $125M Short Trades (SOL) fell 5% in one day on further fears of an FTX sell-off, and current trader positions suggest $125 million is at risk if it bounces back like it did recently.

Solana Stock Drops 5% On New Ftx Plan, Quick Rebound To Clear $125M Short Trades
Solana Stock Drops 5% On New Ftx Plan, Quick Rebound To Clear $125M Short Trades

The price drop comes alongside a 40% decline in Solana’s open interest (OI) over the past 30 days, down to $1.78 billion on May 9, according to CoinGlass data.

A sharp drop in OI usually indicates that traders are uncertain about the cryptocurrency, and are not confident in taking positions on the asset’s price.

However, Solana has a recent knack for quickly recovering from declines, which, so far, can put at risk over a hundred million dollars in short positions.

Over the past 30 days, Solana has seen periods where its price fell and rebounded by 5% within the same 24 hours.

Solana Stock Drops 5% on New FTX Plan, Quick Rebound to Clear $125M Short Trades

On April 19, Solana saw a similar 5% drop before quickly recovering to $157 within hours, before the Bitcoin halving on April 20.

Similarly, if Solana’s price rises 5% to regain its May 7 price of $157, $125 million of short positions will be liquidated.

Solan has a large amount of short positions at risk if it bounces back to $157. Source: Coinglass

Just days before Solana’s May 7 drop, cryptocurrency trader CryptoAce, who goes by the pseudonym, told his 13,400 followers on

However, Solana’s recent decline may be attributed to FTX’s announcement on the same day that it has enough funds to repay victims of the stock market crash once it sells its assets – with Solana being a significant portion of those funds.

This comes alongside a decline in overall cryptocurrency market sentiment, with the Fear Index and Greed Index falling by 13 points over the past 24 hours, reaching 54 points on May 9.

Although new results in the ongoing competition between Solana and Ethereum may also have had an impact on its price in the short term.

On May 8, Cointelegraph reported claims that the Solana network could be on track to surpass the Ethereum network in transaction fees, which could be the positive news indicator Solana needs for a price rally.

As of May 7, Solana’s GEV of $2.8 million was close to Ethereum’s GEV of $3.1 million.

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.

 

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