Solana surges 11% to become fourth largest cryptocurrency, surpassing Binance's BNB token. Short contracts liquidated worth $12 million. SLERF meme coin launch faces $10 million burn issue.
Solana has experienced a remarkable surge of 11% within the last 24 hours, propelling it to become the fourth-largest cryptocurrency by market capitalization, overtaking Binance's BNB token.
As of early Monday morning, the Solana price stands at $206.11, with a market capitalization reaching $92 billion. According to CoinGecko, SOL has witnessed an impressive 40% increase since the same time last week. This surge has propelled SOL beyond its previous all-time high market cap, which it achieved just last Friday.
The recent upswing has led to the liquidation of short contracts worth over $1 million within the past hour—exceeding the combined figures for both Ethereum and Bitcoin during the same timeframe—according to CoinGlass. In total, over $12 million worth of Solana short positions have been liquidated in the past day.
A short position represents a trading strategy wherein investors aim to profit from an asset's price decline. Typically, investors borrow shares of the asset they anticipate will decrease in value, sell them, and commit to repurchasing them at the prevailing market price at a later date.
If their prediction proves correct, they repurchase the asset at a lower price than the initial selling point, generating profit from the price differential minus any associated fees. However, if their prediction goes awry—similar to what occurred for many traders recently—brokerages and exchanges may liquidate their position, forcing closure of the contract to mitigate losses.
While Solana's value has been soaring, the ecosystem encountered turbulence due to an incident involving the SLERF meme coin launch.
During a token presale, a developer inadvertently burned $10 million worth of funds raised. By noon European time on Monday, the developer held a second Twitter space titled "I messed up" to elucidate the situation to the community.
"I am no longer involved in this project," stated the developer. "Unfortunately, I do not possess $10 million to refund everyone; otherwise, I would absolutely do so. This is my current focus."
Subsequently, the developer provided further insights in a subsequent thread.
"Despite the setback, we remain committed to rectifying the situation," the developer affirmed. "While we have made history, the unfortunate consequence is that many individuals have suffered financial losses. We are fully dedicated to compensating presale participants to the best of our abilities."