Solana (SOL) has been soaring, looking at the performance in the daily chart. At spot rates, the coin is trading above $50, up 520% in the past year when it slipped below $8 following the collapse of FTX, a now-defunct crypto exchange, and Alameda Research, a trading wing linked with FTX and one of the leading crypto market makers.

Though Solana is “blistering” and at new 2023 highs, Kaiko, a crypto analytics platform, is concerned about the disparity in liquidity in USD and “native unit” terms. Typically, the “native unit” refers to the base unit of account of any currency, in this case, SOL. 

Native units can be used to measure market depth since it provides easier access for gauging the relative liquidity of the coin without the need to convert it to other denominations, like USD or BTC, for example.

As Kaiko notes on November 14, at a 1% market depth, Solana’s liquidity in USD terms is at the highest level since the collapse of FTX. However, looking at SOL’s liquidity through another lens, the coin is struggling. Using “native units” as a liquidity gauge, it is at the lowest point since the FTX collapse.

The collapse of FTX was critical not only for SOL and its native tokens but also for the broader crypto markets. Following the bankruptcy of the Sam Bankman Fried exchange in November 2022, SOL prices cratered as fear of contagion across the board also saw Bitcoin (BTC) prices shrink, failing at its perceived role as a safe haven.

By November 2022, Bitcoin had flash crashed below $16,000, with Solana dumping from highs of $220 to as low as $8. This contraction also saw crypto’s liquidity, which was more adverse in Solana.

Looking at how liquid SOL is in its native units, it is apparent that liquidity is yet to recover and might require more time despite the general optimism across Solana communities. According to Kaiko, it suggests that market makers are opting to maintain stable liquidity for SOL even with soaring prices in USD terms.

Presently, SOL prices are steady above $50 but maintain an uptrend versus the USD. There are a series of lower lows in lower time frames, early indicators that the upside momentum might be cooling off, and SOL traders possibly exiting their long positions. Even so, $38, marking November 2022 highs, is a vital reaction point for technical analysts.

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