Solana’s latest price performance surprised many market participants after successfully rebounding from $16 to $19 and making an attempt to go even higher. However, on-chain and market data suggest that traders do not want to see SOL prosper on the market and would rather provide additional selling pressure to keep it around the bottom.
It is no secret that Alameda and FTX were two of the biggest holders of Solana. As expected, after both entities required additional liquidity, SOL was sold on the market immediately, resulting in a massive 50% crash in a matter of three days.
😒 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. https://t.co/e2jSAmLEqf pic.twitter.com/1qisr8inaj— Santiment (@santimentfeed) November 23, 2022
Solana stakers have added more fuel to the fire as they urgently withdrew assets from staking contracts, causing even more panic among investors who were actively liquidating their remaining SOL holdings.
After the dust settled, a record-breaking amount of SOL did not hit the market. According to on-chain data, more than 80 million SOL tokens were on their way to the open market. However, the lack of liquidity and inability of SOL market makers to cover such a large selling volume most likely saved investors from a crash to $0, at least for now.
As the industry calmed down, Solana saw a mild rebound to the $19 price level. Unfortunately, the composition of orders on derivatives and spot markets suggests that retail traders and investors are not willing to support the recovery of the SBF-endorsed cryptocurrency.
Funding rates for Solana are heavily tilted toward short orders and will most likely stay that way as no fundamental changes are expected to happen on the market to somehow make SOL more attractive to retail or institutional investors after the 50% price dump.