Solana Is Up 520% In 1 Year: Why Is This Metric Worrying For Bulls?
14 Noviembre 2023 - 8:00PM
NEWSBTC
Solana (SOL) has been soaring, looking at the performance in the
daily chart. At spot rates, the coin is trading above $50, up 520%
in the past year when it slipped below $8 following the collapse of
FTX, a now-defunct crypto exchange, and Alameda Research, a trading
wing linked with FTX and one of the leading crypto market makers.
Solana Blistering Rally At The Back Of Dropping Liquidity? Though
Solana is “blistering” and at new 2023 highs, Kaiko, a crypto
analytics platform, is concerned about the disparity in
liquidity in USD and “native unit” terms. Typically, the “native
unit” refers to the base unit of account of any currency, in this
case, SOL. Native units can be used to measure market depth
since it provides easier access for gauging the relative liquidity
of the coin without the need to convert it to other denominations,
like USD or BTC, for example. Related Reading: Celestia Strikes:
How This Lesser-Known Coin Went Berserk With 126% Price Explosion
As Kaiko notes on November 14, at a 1% market depth, Solana’s
liquidity in USD terms is at the highest level since the collapse
of FTX. However, looking at SOL’s liquidity through another lens,
the coin is struggling. Using “native units” as a liquidity gauge,
it is at the lowest point since the FTX collapse. SOL Still Reeling
From FTX Collapse, What Happens Next? The collapse of FTX was
critical not only for SOL and its native tokens but also for the
broader crypto markets. Following the bankruptcy of the Sam Bankman
Fried exchange in November 2022, SOL prices cratered as fear of
contagion across the board also saw Bitcoin (BTC) prices shrink,
failing at its perceived role as a safe haven. By November 2022,
Bitcoin had flash crashed below $16,000, with Solana dumping from
highs of $220 to as low as $8. This contraction also saw crypto’s
liquidity, which was more adverse in Solana. Related Reading:
Bitcoin Could Plunge To $30,200 If This Level Is Lost: Analyst
Looking at how liquid SOL is in its native units, it is apparent
that liquidity is yet to recover and might require more time
despite the general optimism across Solana communities. According
to Kaiko, it suggests that market makers are opting to maintain
stable liquidity for SOL even with soaring prices in USD terms.
Presently, SOL prices are steady above $50 but maintain an uptrend
versus the USD. There are a series of lower lows in lower time
frames, early indicators that the upside momentum might be cooling
off, and SOL traders possibly exiting their long positions. Even
so, $38, marking November 2022 highs, is a vital reaction point for
technical analysts. Feature image from Canva, chart from
TradingView
Celestia (COIN:TIAUSD)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Celestia (COIN:TIAUSD)
Gráfica de Acción Histórica
De May 2023 a May 2024