Solana is witnessing significant underperformance compared to major cryptocurrencies, attributed primarily to its higher leverage exposure. In the past 24 hours alone, liquidations in Solana have surged to $31.6 million as investors engage in deleveraging and profit-taking activities. This trend has been mirrored across the market, which experienced total liquidations exceeding $290 million.
Analysts suggest that Solana’s recent struggles can be linked to a “buy the rumor, sell the news” paradigm in relation to moves by Forward Industries and DeFi Development Corp. Both companies had previously announced intentions to acquire Solana assets; once the announcements became official, the market reacted negatively as speculative holders exited their positions.
Currently, Solana is trading around $213, having seen a more than 9% decrease over the last week and a roughly 3% drop in the past day. Market observers note that Solana’s derivatives contracts have contributed significantly to the forced selling, outpacing liquidations in Bitcoin and Ethereum.
The anticipated distribution of $1.6 billion from the FTX estate toward the end of the month is adding additional downward pressure on Solana, further complicating its recovery prospects. This upcoming distribution has raised concerns among investors, contributing to bearish sentiment in the market. Gordon Grant, a portfolio manager at Bitwise, indicated that this development has dampened market enthusiasm, although he does not view the current 15% pullback as extreme, especially given Solana’s substantial rally earlier this month.
As the market recalibrates, participants on platforms like Myriad, a prediction market affiliated with Decrypt’s parent company DASTAN, are increasingly doubtful about Solana reaching a new all-time high before the year’s end. Predictions indicate roughly a 50-50 chance that Solana will surpass its record of $293.31, a significant decline from earlier estimates that suggested a 65% likelihood of such an achievement just days prior.
The overall sentiment surrounding Solana reflects a complex interplay of market dynamics, encompassing forced selling, external corporate moves, and future distributions that present both challenges and opportunities for recovery.
