The post Solana Is Up 520% In 1 Year: Why Is This Metric Worrying For Bulls? appeared on BitcoinEthereumNews.com.

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. 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…

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Filed under: News - @ November 15, 2023 6:20 am