Solana rallied by over 13% [at press time] in the last 24 hours as investors continue to short the asset in significant numbers. But based on its overall performance, the token’s value remained in a downtrend.
A report by data analytical platform Santiment noted that SOL’s price dropped over 60% in a fortnight amidst massive shorting on Binance and perpetual trading platform DyDx.
In trading, Shorting signifies the act of selling the cryptocurrency in the hope that it falls in value making it easier to buy back at a lower price. Traders can then profit from the difference in market price.
The above information suggests that despite Solana’s price returning to 9% in the last 15 hours, the majority of investors are still banking on the asset’s price to fall further.
Ideally, in such scenarios, prices tend to decline but according to Santiment the ongoing FUD in the aftermath of the FTX collapse might see more price rebound.
There are not a lot of big Solana believers, even as its price bottomed out at $11.02 and rebounded to $12.70 over the past 15 hours. This FUD could cause more rebounding until traders slow down their nearly unanimous bets against SOL‘s price.
Recently, CoinShares, a digital asset investment management released a report revealing that investors cashed out $6 million in altcoins last week. These assets were mostly Solana, XRP, Binance, and Polygon “likely being a direct result of the ongoing fallout from the FTX collapse.”
Once known as the “Ethereum Killer,” SOL started trading in 2022 at $178, with a market value of $55 billion in January 2022.
Solana is Down By Over 90% In A Year
But then came “crypto winter” and the bankruptcy of cryptocurrency exchange FTX which nearly annihilated SOL price which is currently down by almost 93% over the year, trading at $13 with a $5.2 billion market value.
The demise of FTX marked the onset of the most recent decline in Solana. The blockchain Foundation’s exposure to the failing exchange came to light on November 14, days after FTX filed for Chapter 11 bankruptcy protection.
“This is less than 1% of SOL Foundation’s cash or cash equivalents and as such, the impact on Solana Foundation operations is negligible,” the Solana Foundation asserted in a post.
However, according to Forbes and the Financial Times, FTX held $982 million worth of SOL on November 10 at the time of its collapse.