According to a well-known cryptocurrency trader, one Ethereum (ETH) competitor is nearing a bottom after losing roughly 95% of its value in 2022.
Cantering Clark, a pseudonymous analyst, tells his 156,300 Twitter followers that market sentiment on smart contract platform Solana (SOL) is so bearish that it could be a sign of a local bottom.
“It appears that the market is a little crowded here. I believe that my interpretation of calling for another 50% drop, along with everyone else’s call for $3, is a sign that this thing is completely one-sided and could bottom here in the near future.”
Cantering Clark predicted a massive drop for SOL last week, saying the Ethereum rival could fall between $5 and $3. Now, the trader believes that Solana will face a short squeeze.
“Long SOL for possibly more of a squeeze.”
A short squeeze occurs when traders who borrow units of an asset at a certain price with the intention of selling them at a lower price and pocketing the difference are forced to buy the assets back as the trade moves against their bias.
According to data from analytics firm CoinGlass, shorts account for more than 51% of SOL positions in the last 12 hours, indicating that traders are betting on the altcoin falling.
At the time of writing, Solana is trading for $9.80, a slight decrease from the previous day.
In terms of what the crypto markets might look like in 2023, Cantering Clark predicts that digital assets will likely trade in a wide range with no new record highs.
“This is my forecast for 2023. Wide spreads across all asset classes, but no new all-time highs. Gold is still outperforming.”