Solana Short Sellers in Panic as SOL Price Recovery Puts $125 Million Liquidations at Risk
Solana, a prominent cryptocurrency in the market, experienced a significant 5% decline that caught the attention of investors. The cause of this dip was concerns surrounding FTX’s plan to sell off assets. However, Solana quickly rebounded, potentially resulting in the liquidation of approximately $125 million in short positions, causing short sellers to lose money.
Over the past month, Solana’s open interest (OI) decreased by 40%, dropping to $1.78 billion on May 9, according to CoinGlass data. Such a substantial drop in OI often leads to caution among traders, who become hesitant to make big moves in the crypto market.
Despite the uncertainty, Solana has demonstrated resilience, recovering from drops and shaking up existing short positions. For instance, on April 19, Solana fell 5% but swiftly recovered to $157, just before Bitcoin’s halving event.
If Solana can reclaim 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.
The recent decline in Solana’s price can be directly attributed to FTX’s announcement of plans to sell assets to compensate victims of its collapse. Since Solana holds a significant portion of these assets, the announcement shook investor confidence.
Furthermore, the Fear and Greed Index recently dropped by 13 points in a 24-hour period, reaching a score of 55 on May 9. These shifts in sentiment undoubtedly affect Solana’s short-term trajectory.
Meanwhile, rumors in the crypto world suggest that 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 outlook for its future.
Currently, Solana is priced at $143.81, reflecting 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 strong position in the crypto landscape.