MON Rallies 17% as Short Squeeze, Record TVL Boost DeFi Token

Monad's native token MON rallied over 17% recently, peaking at $0.028 as short sellers faced $133 million in liquidations. The DeFi token remains below its November all-time high of $0.045 despite growing ecosystem traction. This rally coincides with capital rotation toward altcoins during Bitcoin's consolidation near $88,000 support.

Why Is Monad (MON) Surging in Early 2026?

A short squeeze triggered MON's double-digit rally as leveraged positions unwound rapidly. Over $133 million in bearish bets liquidated amid the token's recovery from post-airdrop lows. Capital rotation toward higher-risk assets also boosted MON, with altcoins collectively outperforming as Bitcoin struggled near key support zones. Trading volume patterns reveal selective positioning into emerging DeFi tokens like MON during market uncertainty.

Can Monad Sustain Its DeFi Momentum?

Monad's DeFi ecosystem shows promising traction with record $251 million TVL and $397 million in stablecoins. Its flagship app Upshift expanded liquidity by 82% to $476 million last month, signaling adoption of its Solana-like app-growth model. Staking participation remains robust with 14% of MON supply locked for up to 12% annual yields. Integrations with Phantom and MetaMask potentially expose MON to over 30 million users, while Kalshi's new fast-deposit system enhances transaction speeds to 10,000 TPS.

What Risks Could Challenge MON's Rally?

App-based revenues have slowed since late 2025, coinciding with weaker post-holiday crypto trading activity. MON's derivative market nears record open interest at $127 million, creating potential volatility risks if positions rapidly unwind. Bitcoin's technical uncertainty near $88,000 threatens broader altcoin momentum, with the Fear and Greed Index at 34 reflecting market caution. Regulatory developments could also impact growth projections for emerging chains like Monad despite current institutional interest.