- Solana’s price experiences a downturn following FTX announcement.
- Open interest drops on heightened uncertainty.
- Technical indicators still show bullish signals.
Solana, known for high speed and low fees, has recently shown resilience amid the ongoing FTX bankruptcy. Despite large sales of FTX’s Solana holdings to major institutions, the token has so far been shielded by significant lockups.
However, Solana’s price recently dipped due to renewed concerns over FTX liquidation. This was followed by a significant drop in open interest, as traders reassess their positions.
Solana Drops on Renewed Concerns Over FTX
On Thursday, May 9, Solana (SOL) dropped 3.43% to $143.08, triggered by FTX’s plan to sell its assets to repay creditors. FTX’s announcement read that, with the sale of all its assets, it would have enough funds to repay its creditors.
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Consequently, the concerns over liquidation have caused a decrease in derivatives trading. Solana’s derivatives trading volume decreased by 6.52% to $5.53 billion, suggesting that traders are holding back from speculative bets. This hesitation is further highlighted by a 5.53% drop in open interest, down to $1.80 billion, with traders reducing their exposure.
In the last 24 hours, Solana witnessed $7.61 million in total liquidations, with long positions accounting for $4.7 million and short positions for $2.91 million. However, this could change if Solana experiences a rebound; data suggests this may be likely.
Long-short ratios reveal traders’ optimism about Solana’s potential rebound. For instance, the long-short ratio on Binance is 2.3557, meaning that more accounts are betting on a SOL rebound. On OKX, the ratio is 1.75, showing a similar optimistic sentiment. Technical analysis also shows bullish signals.
Solana Technicals Lean Bullish
Solana’s technical indicators reveal a predominantly bullish sentiment. For one, both the 10-day Exponential Moving Average (EMA) at 144.29 and the Simple Moving Average (SMA) at 142.20 signal buy. However, longer-term moving averages, including the 30-day EMA and SMA, indicate potential resistance at higher levels.
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Oscillators are generally neutral, with the Relative Strength Index (RSI) at 47.89, which indicates neither overbought nor oversold conditions. Moreover, the Stochastic %K at 64.59 and the MACD Level at -3.00 both suggest neutral to slight bullish momentum.
The indicators show a generally positive sentiment towards SOL/USD in the short term while indicating a more neutral outlook in the medium term.
On the Flipside
- Technical indicators reflect current market sentiment rather than a prediction of future movements.
- Solana has been battling with ongoing congestion issues, largely caused by an increase in DEX volumes.
Why This Matters
Understanding Solana’s technicals provides insight into the market’s reactions to SOL’s FTX sales. This is crucial for both traders and investors in the SOL ecosystem.
Read more about Solana’s bid to take third place among cryptos:
Here’s How Solana Can Outpace BNB and USDT: Franklin Templeton
Read more about Solana trailing Ethereum in a key metric:
Ethereum Faces Solana Challenge as Validator Income Rises
