Solana fell 5% on the new FTX plan, quickly wiping out about $125 million in shorts.
Solana added that the sell-off of FTX decreased by 5% per day, and the current trader points out that $125 million is at risk if the position is to be restored soon.
The price drop comes alongside Solana's (SOL) 40% drop over the past 30 days to $1.78 billion, according to CoinGlass data.
The sharp drop in OI indicates that traders are particularly uncertain about the currency and are not confident in taking positions on asset prices.
However, Solana has the ability to quickly recover from dips, which can put more than a hundred million dollars at risk on current short positions.
Over the past 30 days, Solana has seen periods where its price has dropped and recovered 5% in 24 hours.
In the year On April 19, Solana saw a similar 5% decline before recovering to $157 within hours, just before Bitcoin's halving on April 20.
Similarly, if Solana's May 7 price rises 5 percent to recover $157, $125 million in short positions will be rejected.
A few days before Solana plunged on May 7, anonymous crypto trader CryptoS told his 13,400 followers that Solana's price on X was “in a protective box” and correctly predicted a decline to the $142.50 level.
However, Solana's recent downfall may be due to FTX selling its assets on the same day it announced it had enough cash to pay victims of the exchange's debacle — a large part of them Solana.
Related: Solana-to-Bitcoin cross-chain bridge aims for Q3 2024 launch.
This fear and greed index has fallen 13 points over the past 24 hours to 54 on May 9, along with a decline in overall cryptocurrency market sentiment.
However, new developments in the ongoing competition between Solana and Ethereum may affect the price in the short term.
On May 8, Cointelegraph reported on claims that the Solana network may be on its way to surpassing the Ethereum network in transaction fees, which could be a positive sign that Solana is looking for a price increase.
On May 7, Solana's total economic value was $2.8 million, compared to Ethereum's total economic value of $3.1 million.
Magazine: What do crypto market makers do? Liquidity, or fraud
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
