Affected by a recent announcement from FTX of the auction of its SOLs, Solana displays a very unattractive performance. 5% loss of its value in one day is a big blow for crypto. Now, the world of traders is on alert. The 125 million short positions currently open are likely to be closed as soon as the price of SOL returns to its previous level. However, bullish signs remain. We are talking about it.
Solana Open Interest Down 40% Over Last 30 Days
Seen as a valid competitor to Ethereum, the SOL crypto had raised a lot of hope among traders. On May 7, Solana generated $2.8 million in transaction fees, compared to Ethereum's $3.1 million. On May 8, transaction fees on Solana surpassed those on Ethereum.
However, if many had bet on SOL, traders are now less excited, considering the recent fluctuations in its price. Indeed, based on CoinGlass datathis May 9, Solana's open interest fell to $1.78 billion, a decline of 40% over the last 30 days.
This crypto fall occurred on the day FTX announced that it was ready to repay creditors' funds after selling its SOLs. The announcement affected general market sentiment, since on the same day, the crypto fear and greed index rose from 13 to 54. Clearly, investors are losing confidence in Solana.
Solana: $125 million in short positions at risk
When we take a look at the evolution of the SOL over the last 30 days, we notice that the crypto displays good recovery capacity. It sometimes lost 5% of its value before recovering over the same period.
On April 19, for example, a few hours before the bitcoin halving, it lost 5% of its value before quickly rising to $157. But if its capacity for rapid recovery is a positive characteristic, the frequency of fluctuations in its price does not help traders who now fear suffering losses.
If the crypto price recovers to $157, there is a risk that the nearly $125 million in short positions currently open could be closed. We will therefore have to stay awake, because if this happens, the price of the crypto could fall further, unless the institutional demand for SOL continues.
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