Ethereum ($ETH) rival Solana ($SOL) could soon see its price surge as investors have started capitulating, which historically has been the time in which markets rebound and prices recover.
According to data from on-chain analytics firm Santiment, the fear, uncertainty and doubt (FUD) surrounding Solana could lead to a rebound “until traders slow down their nearly unanimous bets against $SOL’s price.”
😒 There are not a lot of big #Solana believers, even as its price bottomed out at $11.02 and rebounded to $12.70 over the past 15 hours. This #FUD could cause more rebounding until traders slow down their nearly unanimous bets against $SOL’s price. https://t.co/e2jSAmLEqf pic.twitter.com/1qisr8inaj
— Santiment (@santimentfeed) November 23, 2022
At a time in which there aren’t a lot of believers in the cryptocurrency, some suggested that a short squeeze could soon occur. A short squeeze triggers a rapid, unexpected rise in prices that then gains momentum as short sellers exit their positions. As sellers close their positions, the influx of buy orders further helps the price of the asset rise.
According to Santiment, bearish sentiment has been reining in the cryptocurrency space, to the point the “word dead has been rapidly circulating around crypto platforms in November.” Per the firm, this is a “sign of traders giving up on markets rebounding,” as capitulation is “historically when markets rebound.”
☠️ The word #dead has been rapidly circulating around #crypto platforms in November. As one of the more #bearish sentiment words, this is a sign of traders giving up on markets rebounding. Ironically, this capitulation is historically when markets rebound. https://t.co/lZucDQEYli pic.twitter.com/j4cmfGiVz5
— Santiment (@santimentfeed) November 22, 2022
Solana is at the time of writing trading close to the $15 mark, after falling to a low of around $11 earlier this month. The cryptocurrency’s price plunged after the collapse of crypto exchange FTX and its sister firm Alameda Research after a bank run on the platform.
FTX CEO Sam Bankman-Fried is a well-known $SOL supporter and has invested in various projects on the cryptocurrency’s ecosystem. His involvement in these projects has affected investors’ confidence in them in the wake of FTX’s collapse.
Notably, former Goldman Sachs executive Raoul Pal has explained why he believes this could be a great time to buy $SOL, the native token of the Solana blockchain, despite all the doom and gloom surrounding the Solana ecosystem in the wake of the collapse of FTX.
During an “Ask Me Anything” session streamed on YouTube channel “Real Vision Crypto”, Pal had this to say about Solana, after detailing he likes Solana and the situation it’s currently in, and noting it’s “doing something very clever.”
“Solana reminds me of Ethereum back in 2018 when it was down 97% and nobody cared. And that was a great bloody opportunity.”
In another session, Pal said he understands Solana “keeps breaking” and that “everybody knows that so there is no informational edge in that whatsoever.” Per his words, if it “ survives breaking and it’s one of the largest crypto protocols and it has more activity than any other chain outside of Ethereum, then the likelihood that Solana participates well in the next up cycle is very high to me.”
Featured image via Unsplash