The ninth largest cryptocurrency by market capitalization is up around 7% in the last 24 hours. Solana’s local token SOL rose from $35.2 to $38.87 on Tuesday morning. Solana is a fast proof-of-stake (PoS) blockchain network that enables many of the same activities as Ethereum, including decentralized finance applications (DeFi) and non-fungible tokens (NFTs).
The recent rise was fueled by a significant increase in trading volume. Over the past 24 hours, CoinMarketCap reports that Binance, FTX, Coinbase, and Kucoin have gained 93.74% in price. The most popular trading pair is the US dollar or its stablecoin equivalents.
The Solana token has increased by 15% in the past week. On Tuesday, SOL was trading around $33. Traders with short SOL positions have also been hammered in the last 24 hours. A total of $4.09 million was liquidated, of which more than 82% were short positions.
Traders shorting an asset, whether cryptocurrency or otherwise, first borrow the asset from a broker or exchange. The borrowed property is then sold on the open market with the expectation that the price of the property will fall. If the asset goes down, the trader buys it back at a lower price, repays the debt (which is denominated in the asset, not fiat), and pockets the difference as profit.
However, if the market moves against the trader, he can take a loss by buying the appreciated asset to repay the loan.
