Published on mei 9, 2024, 7:35 am
Image source: Fox News
```json { "TLDR": "Solana saw a 5% drop in value due to concerns about FTX's sell-off, risking $125 million in short positions. Despite uncertainty, Solana has a history of recovering quickly. The decline in open interest suggests traders' lack of confidence. Competition is rising between Solana and Ethereum, with potential positive news for Solana on transaction fees. Market sentiment dipped slightly with Fear and Greed Index falling by 13 points." } ```
Solana, one of the prominent altcoins in the cryptocurrency market, experienced a 5% drop in a single day amid concerns related to FTX’s sell-off. This dip has put approximately $125 million worth of short positions at risk of being liquidated if Solana bounces back swiftly, as it has done in recent instances.
The decline in price coincided with a significant 40% decrease in open interest (OI) for Solana over the past month, amounting to $1.78 billion on May 9, according to CoinGlass data. A drop in OI typically indicates traders’ uncertainty and lack of confidence in taking positions on the asset’s price.
Despite this, Solana has demonstrated a remarkable ability to recover rapidly from its downturns. Over the last 30 days, there have been occasions where Solana’s price dipped by 5% only to bounce back within 24 hours. For instance, on April 19, Solana saw a similar decrease before swiftly regaining strength just before Bitcoin’s halving event on April 20.
If Solana manages to rise by 5% to reclaim its previous price of $157 from May 7, it could lead to the liquidation of approximately $125 million in short positions. The recent fall in Solana’s value might be partially attributed to FTX’s announcement that it had sufficient funds to reimburse victims following the exchange’s collapse by selling off assets, including a significant portion comprising Solana.
Furthermore, ongoing developments show increasing competition between Solana and Ethereum. Claims indicate that the Solana network might surpass Ethereum in transaction fees, potentially acting as positive news that could trigger a price spike for Solana. Recent comparisons on May 7 showcased that Solana stood close at $2.8 million total economic value compared to Ethereum’s $3.1 million total value.
Overall market sentiment took a slight hit recently with Fear and Greed Index falling by 13 points over the past 24 hours and reaching a score of 54 on May 9. It is important to note that this article does not offer any investment advice or recommendations; all investment decisions involve risks and readers are encouraged to conduct thorough research before making any financial decisions related to cryptocurrencies.
Original article posted by Fox News
