SOL leapt back above $13 on Tuesday following nearly nine straight days of losses that saw them trade at just over $8 on Friday. Selling pressure had resulted from Solana's close links to Sam Bankman-Fried, the disgraced founder of crypto exchange FTX, who faces charges of fraud and misappropriation of client funds.
The recent price surge has liquidated some $6.7 million of short positions, according to Coinglass. This is the largest short liquidation since the collapse of FTX exchange and the subsequent market crash in November. Funding rates for SOL perpetual swaps are deeply negative, per Coinglass data, suggesting traders are bearish and betting for the token's price to drop, also known as shorting.
The Bonk airdrop – amounting to 50% of its token supply – likely drove massive community interest. Some 20% of the total airdrop supply is going to Solana NFT collections – comprising 297,000 individual NFTs – and 10% to Solana-focused artists and collectors. Airdrops refer to an unsolicited distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses and are generally used as a tactic to gain users.
Bonk prices rose some 95% in the past 24 hours. Major memecoins such as shiba inu (SHIB) and dogecoin (DOGE) were unchanged.
Memecoins are known to attract irrational exuberance from the crypto community, with the market capitalization of SHIB and DOGE reaching over $30 billion each in early 2022.
UPDATE (Jan. 3, 16:45 UTC): Updates with SOL's outperformance.
UPDATE (Jan. 3, 17:49 UTC): Updates with SOL's short liquidation data.
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