Solana (SOL) Makes Stellar Gains, 40% Increase in a Week Sets New 2023 High
The Solana (SOL) cryptocurrency has enjoyed a spectacular week, with a price increase of 40%, marking a new high for 2023 at about $58. This remarkable surge is attributed to several factors including a general uptrend in the cryptocurrency market, driven by Bitcoin ETF excitement and an overall growing appetite for risk.
Unfazed Solana Bulls Despite FTX-dump Fears
The remarkable rise of Solana aligns with FTX bankruptcy estate’s daily sale of 250,000-750,000 SOL tokens in the last fortnight. Despite initial fears, these sales have had a limited impact thanks to the vesting and locking of some tokens, and a weekly sale limit of $100 million, subtly transforming apprehension into investor enthusiasm.
Indeed, Solana-focused funds, which serve as an indicator of institutional flows in the SOL market, recorded impressive inflows worth $10.80 million in the week ending Nov. 3, 2023.
The Bitcoin ETF Euphoria Factor
One of the main drivers of the overall cryptocurrency market uptrend is the widespread excitement surrounding Bitcoin ETFs, spearheaded by Bitcoin’s climb toward $38,000. Out of all the cryptocurrencies, Solana has maintained the top spot performer in the past 30 days.
Solana’s Futures and Funding Rate Records Significant Surge
On Nov. 11, 2023, Solana’s futures open interest attained a key level of approximately $772 million, the highest since November 2021, when SOL’s price set a record high of $260. The increasing level of interest could result in enhanced liquidity in the market.
Interestingly, the rising open interest is accompanied by increasing funding rates, which is a fee paid by one side of the perpetual contracts to the other every eight hours. In fact, SOL’s funding rate increased to 0.035% per eight hours earlier this week. This conveys a bullish market sentiment with a higher appetite for leveraged longs among investors. In other words, most derivatives traders are forecasting SOL price rally to proceed further.
SOL Price Technical Breakout
Solana’s impressive gain this week partakes in a bullish breakout move. Notably, SOL’s price surpassed the horizontal trendline resistance of its ascending triangle channel two weeks ago. If the upward trend continues, SOL’s price could reach around $90 by the end of the year, marking a 50% rise from current price levels.
However, it’s worth noting that the weekly relative strength indicator (RSI) is at its most overbought level since September 2021. Hence, the potential for a market correction is high, with SOL prices predicted to stabilize at the triangle’s upper trendline near $30.
Please note that this article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
