The market environment in Solana is becoming more gloomy, and the statistics support this. The astonishing 11.7 million is a record high for aggregate open interest. Liquidations have increased to 3,300 contracts while the overall trading volume is plummeting. What is happening?
First, let’s discuss the cost. The most recent statistics show that Solana is now trading at $18.01. That is a considerable cry from when it was at its peak, and not just small-time investors are feeling the heat. The DeFi market on Solana is also beginning to feel the pressure, as trade volume and liquidity both decline.
Let’s now discuss the FTX liquidation, which is the proverbial “elephant in the room.” As previously reported in U.Today publications, FTX has been given authorization to sell a large portion of its holdings, including Solana. Although the precise time is still unknown, the market becomes uneasy at the mere thought of it.
Why the heavy shorting then? In any case, the total open interest indicates that bears are increasing their stakes in the belief that Solana’s price will keep falling. A large number of traders are apparently being caught on the wrong side of these bearish bets, as seen by the dramatic increase in liquidations. The forthcoming FTX liquidation may be the trigger that sends Solana spiralling even farther in this vicious cycle.
In conclusion, Solana is mired in a wave of pessimism, and the evidence suggests to further decline. All indications lead to bad news, whether it is the rising open interest, the declining trading volume, or the sharp increase in liquidations. Not to mention the FTX liquidation wildcard, which might provide the decisive blow.
Both traders and investors should exercise caution. The market dynamics in Solana at this time are risky, and the negative indications are too obvious to ignore.
