Onchain $SOL Short Liquidations Exceed CEX Counterparts - Is DeFi The New Normal?

After months of fluctuation crypto markets appear to have finally broken out of trade-talk purgatory, sending Bitcoin back over $100k and pulling majors like Ethereum and Solana out of their respective ranges.

With Coinglass reporting over $727M in liquidated shorts on centralized exchanges, a remarkable trend has emerged suggesting the bulk of $SOL perps trading has moved onchain.

With $SOL briefly surging back over $170, which ecosystem tokens are leading the charge?

$SOL Liquidations Move Onchain

While bullish optimism has been quietly simmering in markets for weeks, traders were still caught unaware by this week’s powerful move. Without any discernible bullish catalysts, bulls piled into markets, liquidating over $727M in short positions as Bitcoin reclaimed a key psychological price point at $100,000.

While levered $ETH-shorts constituted the bulk of liquidated positions, an anomaly in $SOL markets indicates a seismic change in the crypto trading landscape. Cross-referencing data from Coinglass and Ranger Finance suggests that while $SOL short liquidations on centralized exchanges totalled $31.2M, onchain markets witnessed over $47.2M in liquidations.

This suggests that, at least in $SOL pairs, traders are finding greater liquidity and activity in decentralized, onchain markets as opposed to their centralized counterparts. 

Trading activity on $SOL and other prominent digital assets shifting away from centralized exchanges onto their native chains marks a critical milestone for the industry. By outpacing centralized exchanges, onchain trading platforms prove that traders are enjoying a superior experience in blockchain-based markets, while still upholding the ethos of decentralization and permissionlessness.

Which Solana Ecosystem Tokens Take the Lead?

While Ethereum undeniably led the market-wide surge across majors, $SOL comfortably outperformed rival Top 10 coins like $XRP, $BNB, and $ADA, rising 12.5% on a weekly time frame to currently exchange hands at $169.

Unsurprisingly, Solana’s resilient meme economy bounced back hardest. Viral memecoins from yesteryear returned with a vengeance, led by heavyweights like $MOODENG, $PNUT, and $CHILLGUY up 226%, 74%, and 33%, respectively.

Among project tokens, $CLOUD, $PYTH, and $JUP led the charge. Outperforming popular memecoins like $BONK and $PENGU, $CLOUD is currently up over 44% this week, while the majority of Solana project tokens netted gains of between 5-15%.

While the market-wide surge is sparking feelings of optimism amongst crypto enthusiasts, traders are advising caution. 

Throughout the past year, bullish $ETH price action has typically preceded a sharp downturn, instilling apprehension in market participants. Traders are particularly careful during weekends, when lower trading volumes and thinner liquidity could facilitate increased market volatility.

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