Why did Solana prices go up this week?
Solana (SOL) price rose 40% this week to a new 2023 high of around $58.
It is Solana's best weekly performance since January 2023. Several factors contributed to the gains, including overall cryptocurrency market growth led by Bitcoin ETF euphoria and overall risk appetite.
FTX-domp fears could not shake the Solana bulls
The addition of Solana has seen 250,000-750,000 SOL tokens sold daily on FTX Sanxar Estate over the past two weeks.
FTX has been trading between 250k-700k$SOL daily for the past 2 weeks with the price going higher or going sideways.
It's been sinking like a champ so far and their currently unlocked tokens should be depleted within a week.
Once this seller is gone… 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 owned or locked up and the weekly sale cap of $100 million, turned initial fears into investor enthusiasm.
For example, Solana-focused funds, one of the barometers for measuring institutional flows in the SOL market, saw inflows of $10.80 million at the end of November 3, CoinShares reported.
The euphoria of the Bitcoin ETF is one of the main reasons for the general growth of the cryptocurrency price, which is the increase in Bitcoin to $38,000. But Solana has been the best performer in the last 30 days.
Solana open interest comes out with the money amount
Solana futures open interest reached around $772 million on Nov. 11, the highest since November 2021, when the SOL price hit a record high of $260. Higher open interest rates indicate more demand and a higher amount of money in the market
Meanwhile, Solana's increasing OIA coincides with increased cash flow, which is the amount paid by one party to another in perpetual contracts every 8 hours. A positive fund return means that the longs (buyers) are dominating the market, ie, they are paying the shorts (sellers).
Earlier this week, the SOL funding rate increased to 0.035% every eight hours. This funding rate represents a 0.735% weekly cost to bullish long, indicating strong bullish sentiment in the market.
The rising rate of OI and funding shows a strong long-term appetite among investors.
Simply put, most derivatives traders expect the SOL price rally to continue further.
SOL value technical failure
Solana's gains this week appear to be part of a bullish crash movement. Specifically, SOL price broke above the horizontal trend resistance of the upward triangular channel two weeks ago.
If a downward reversal of the ascending triangle plays out, the upside target for SOL price before the end of the year is around $90, a 50% upside from current price levels.
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The bears, now pin their hopes on the weekly Relative Strength Index (RSI), which is now at its most overbought level since September 2021.
Therefore, the risk of correction is high by adjusting to the upper trend of the triangle around $30 on the table.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
