SOL, the native asset of the Solana blockchain, has gained significant attention in the crypto market following its massive 50% spike within a few hours.
“While traders are celebrating the resurgence of Bitcoin (back over $21k) and Ethereum (back over $1,550), Solana is the real star as the weekend is kicking off. Up +22% in the past 2 hours alone, SOL has been fueled by liquidated shorts,” Santiment analysts wrote.
At the time of publication, SOL was changing hands at $22.79, up 31% in the last 24 hours as some of the gains had eased. Solana is up 70% weekly, according to CoinMarketCap data.
Santiment, an on-chain analytics firm, believes Solana’s astonishing rise might have been caused by a “short squeeze.” In simple terms, a “short squeeze” is a rapid increase in the price of an asset owing primarily to excessive short selling.
In a chart posted, Santiment wrote, “Solana has surpassed the $22 mark and has nearly tripled since bottoming out at $8 two weeks ago, Shorts propelled the bounce.”
According to the on-chain analytics firm, Solana has seen a shorting bias by traders on Binance consistently over the past month. It noted that even larger ratios of SOL shorts began opening right as the price bottomed out on Dec. 30. SOL’s price has risen by 170% since this bottom was reached.
In recent weeks, the Shiba Inu-themed BONK token has taken center stage in the Solana ecosystem, following a tumultuous period for the blockchain in the aftermath of the Sam Bankman-Fried and FTX fiascos.
BONK has just announced the formation of BonkDAO. The first BonkDAO council was assembled from among “respected Solana community members across DeFi, Art, and NFT initiatives.”
According to a recent report released by Citi Research, activity on the Solana blockchain is still very high. It highlighted that several key metrics, including active addresses and the daily non-fungible token (NFT) volume, had recovered to levels seen before the FTX crash, possibly indicating relief for its users.