As a seasoned crypto investor with a knack for spotting promising opportunities, I find myself intrigued by Solana’s (SOL) recent surge. Having navigated through the crypto market’s ebbs and flows since its inception, I can confidently say that this bull run seems more than just a fleeting memecoin frenzy.
On the interval from November 5th to 7th, Solana’s native token SOL experienced a significant jump of approximately 22.5%, marking its highest point in seven months. This upward trend mirrored the general rise observed among altcoins, which saw an increase of around 17%. Notably, Bitcoin (BTC) also hit a fresh all-time high on November 7th.
A large part of the optimism surrounding cryptocurrencies is due to the win of President-elect Donald Trump and the Republican party’s control of the Senate in the U.S. elections. This could mean less restrictive policies towards innovation in the cryptocurrency market.
The surge in interest for SOL has led to an increase in leveraged trades, pushing the total open positions for Solana futures to a record high on November 7. Although there’s a greater possibility of forced liquidations if SOL prices drop, data from derivatives suggests more upward momentum is yet to come.
SOL futures open interest surged to 21.1 million SOL on Nov. 7, an 11% increase from the previous week and a new high in nominal terms, reaching $4 billion. This reflects a strong adoption of SOL derivatives, suggesting rising institutional interest but also introducing potential risks.
Keeping an eye on significant future contracts can make ‘whales’ attractive targets for those aiming to capitalize on brief market fluctuations. In derivative trading, it’s important to note that long and short positions are constantly counterbalanced. The funding rate thus provides insight into which party is striving for additional leverage.
As a researcher, I’m observing that the current 8-hour Simple Moving Average (SMA) funding rate is at 0.017%, which translates to approximately 1.5% per month. This figure indicates a sentiment that leans towards neutral-to-bullish, as it’s lower than what we usually see during highly enthusiastic market periods, where the long leverage cost can exceed 2.1%. Given this context, the current rate suggests a moderate level of optimism, possibly providing a foundation for continued upward movement in the market.
Strong onchain metrics support continued price growth for SOL
As an analyst, I’ve observed that the recent surge in SOL’s price might primarily be attributed to the memecoins phenomenon. Notably, initiatives like the Pump.fun token launch and the Raydium decentralized exchange (DEX) have witnessed substantial growth due to this memecoin frenzy. Nevertheless, I believe that broader advancements within the Solana ecosystem could catapult SOL’s price beyond $200 and potentially even higher.
Critics like ‘CatfishFishy’ point out the possibility of manipulative trading strategies called “pump and dump” being executed by a select few wealthy investors, often referred to as “insiders.” These individuals hold a significant amount of the supply and use their influence, as well as paid promotions, to artificially inflate the value of an asset. The article also mentions that TikTok’s user base includes minors, leading to discussions about potential regulatory oversight due to underage participation.
The speculation that memecoins are the primary driver behind SOL’s rise to $194 overlooks key factors, such as Solana’s total value locked (TVL), which reached $6.64 billion on Nov. 7, a 22% increase from the prior month, according to DefiLlama data. Significant gains were seen in sectors like liquid staking, perpetual futures, leverage and lending, and others beyond memecoins.
So long as on-chain measurements stay strong and SOL-based derivatives don’t indicate excessive fear or excitement, the competitive edge of the Solana network—providing swift and comparatively affordable transactions—will persistently generate “word-of-mouth” promotion and capture a substantial portion of users due to Bitcoin reaching its all-time high.
Overall, there are no indications of weakness, suggesting a clear path for even higher SOL prices.
This piece serves as a source of general knowledge rather than providing legal or financial guidance. Please note that the perspectives, assumptions, and conclusions stated within this article belong solely to the writer and may not align with or be endorsed by CryptoMoon.
Read More
- ZK PREDICTION. ZK cryptocurrency
- CYBER PREDICTION. CYBER cryptocurrency
- SHIB PREDICTION. SHIB cryptocurrency
- BTC PREDICTION. BTC cryptocurrency
- COMP PREDICTION. COMP cryptocurrency
- JASMY PREDICTION. JASMY cryptocurrency
- AVAX PREDICTION. AVAX cryptocurrency
- ETH PREDICTION. ETH cryptocurrency
- LDO PREDICTION. LDO cryptocurrency
- FARM PREDICTION. FARM cryptocurrency
2024-11-07 21:50