Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Solana (SOL) Plunges by 10%, Here's Possible Reason Behind Drop

Published 2023-11-04, 09:45 a/m
© Reuters.  Solana (SOL) Plunges by 10%, Here's Possible Reason Behind Drop

U.Today - , the seventh largest cryptocurrency, saw profit-taking after a four-day winning streak that culminated in a 14-month high of $46.97 on Nov. 1.

was down 11.79% in the last 24 hours to $38.48 at the time of writing, entering its second day of losses following an amazing price jump on Nov. 1.

Solana has made a tremendous recovery this year, increasing by more than 250% year to date. The cryptocurrency has climbed by more than 80% in the last month, according to the on-chain analytics data provider .

The crypto market is now trading in losses due to profit-taking, but Solana has taken a larger hit, placing among the top losers among the top 100 cryptocurrencies by market capitalization.

Likely reasons for Solana's recent price drop

The exact reason for Solana's price drop is uncertain; however, various variables appear to have contributed to the drop.

In a thread of tweets, offers its thoughts on Solana's price. The on-chain data provider spotted a trend that occurred near the Solana breakpoint event. When analyzing prices before and after the event in previous years, it was discovered that the price of SOL increased to a peak during the breakpoint event and subsequently fell again.

Second, in the previous 10 days, FTX has been selling SOL, transferring out 2.14 million SOL worth over $94 million to sell. In the last 24 hours alone, 1.1 million SOLs worth $42.35 million were sold.

As of Nov. 3, FTX had moved $221.7 million in crypto assets to sell, according to Lookonchain. Solana accounts for about half of this total, with 2,859,886 SOL valued at $102,696.908 transferred out by FTX.

Finally, Solana's price decline could be the result of a long squeeze, which occurs when a sudden drop in market price drives long traders to sell or liquidate their assets.

Before the price dip, Lookonchain reported, citing data, that more traders were long on SOL on the world's largest crypto exchange, Binance, than short. Long positions are taken by traders who believe the asset's value will rise over time.

This comes after global asset manager VanEck released a report in the past week outlining a bullish case scenario in which the cryptocurrency's price might reach $3,200 by 2030.

This article was originally published on U.Today

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.