Traders liquidated some $6.7 million worth of shorts amid rally, according to Coinglass.

Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Solana’s SOL has surged about 20% in the past 24 hours even as larger cryptocurrencies like bitcoin (BTC) and ether (ETH) barely moved, as a decision by newly launched shiba inu-themed token Bonk (BONK) to do a large airdrop generated interest in the Solana community.

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 saw over $19 million in on-chain volumes in the past 24 hours alone. As of Tuesday, since its Dec. 25 issuance, Bonk has over 85,000 holders and a market capitalization of nearly $93 million. Users have conducted over 500,000 transactions using bonk tokens in the past week, data shows.

Several Solana projects have already integrated bonk tokens for use as payments for listed NFTs, while some introduced “burn” mechanisms for NFT-based events. Token burning means removing coins from the overall supply of a cryptocurrency.

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.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

What's your reaction?

Leave a comment

Minimum 4 characters