The price of Solana (SOL) surged 40% this week, hitting a new 2023 high of around $58.
This is Solana’s best weekly performance since January 2023. A number of factors contributed to the rise, including an overall upward trend in the cryptocurrency market driven by excitement about the Bitcoin ETF and an increase in overall risk appetite.
FTX sell-off fears fail to sway Solana bulls
Solana’s rise coincides with the FTX bankruptcy estate selling 250,000-750,000 SOL tokens per day over the past two weeks.
The selling price of FTX is between 250,000 and 700,000 $SOL Every day for the past two weeks has been up or sideways.
So far it’s been like a champ, and at the current rate their unlock tokens should be depleted within a week.
Once this seller is gone I can… pic.twitter.com/AtnTqz3uxG
— Bluntz (@Bluntz_Capital) November 9, 2023
The Delaware Bankruptcy Court approved the sale of 55.75 million SOL tokens in September 2023. The limited impact of these sales, with some tokens already vested or locked, and a weekly sales limit of $100 million, has turned initial concerns into investor enthusiasm.
For example, funds focused on Solana are one of the barometers of institutional flows in the SOL market, witness According to data from CoinShares, inflows were worth $10.8 million in the week ending November 3.
The excitement over the Bitcoin ETF has been one of the main reasons for the overall rise in cryptocurrency prices, with Bitcoin rising to $38,000. However, Solana has been the best performer over the past 30 days.
Solana open interest rises alongside funding rates
Solana’s futures open interest reached a significant level of approximately $772 million on November 11, the highest level since November 2021, when SOL’s price hit an all-time high of $260. High open interest levels indicate greater interest and potentially greater liquidity in the market.
At the same time, Solana’s OI continues to rise, coinciding with the increase in the funding rate, which is the fee paid by one party to the perpetual contract to the other every 8 hours. A positive funding rate usually means that longs (buyers) are dominating the market, i.e. they are paying shorts (sellers).
Earlier this week, SOL’s funding rate increased to 0.035% every eight hours. This funding rate represents the weekly cost of leveraged longs at 0.735%, indicating strong bullish sentiment in the market.
Rising OI and funding rates together suggest higher investor appetite for leveraged longs.
In short, most derivatives traders expect SOL prices to rise further.
SOL price technology breakthrough
Solana’s rise this week appears to be part of a bullish breakout. Notably, SOL’s price broke above the horizontal trendline resistance of its ascending triangle channel two weeks ago.
If the bottom reversal of the ascending triangle occurs, the upward target for SOL price before the end of the year is around US$90, an increase of 50% from the current price level.
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However, bears will be pinning their hopes on the weekly relative strength indicator (RSI), which is currently at its highest overbought level since September 2021.
Therefore, the risk of a correction is high and is expected to be towards the triangle’s upper trendline near $30.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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