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Cointelegraph1 min read
Solana futures open interest rose by 20% this week: Is $100 SOL next?
TL;DR
Solana's futures open interest surged by 20% this week, coinciding with a 10% price increase for SOL, reaching a three-week high. Analysts speculate that easing geopolitical tensions and increased memecoin activity could drive SOL towards $100.
Key points
- Solana's futures open interest rose by 20% this week
- SOL gained 10% in price, reaching a three-week high
- Easing geopolitical tensions may boost SOL price
- Solana leads in DEX volume and total value locked
- Increased memecoin activity could drive SOL towards $100
Key takeaways:
- Solana maintains its market dominance in DEX volume and TVL despite SOL’s underperformance versus its peers.
- Easing sell pressure from volatile geopolitics and a resurgence in memecoin activity could catalyze a SOL price rally to $100.
Solana’s native token SOL (SOL) gained 10% within five days, reaching a three-week high on Friday. This price movement followed a generalized excitement after the US and Iran announced a ceasefire extension, which led to an 8% decline in crude Brent oil prices. Demand for SOL futures surged as open interest jumped by 20% since Sunday, causing traders to question if the SOL price is bound for $100.
SOL futures aggregate open interest, SOL. Source: CoinGlass
SOL futures aggregate open interest rose to $4.2 billion on Friday, up from $3.5 billion on Sunday. While an increased appetite for leveraged positions indicates institutional investor participation, longs (buyers) and shorts (sellers) remain matched at all times. However, any eventual imbalance in the demand for leveraged positions should be visible within the perpetual futures markets.
Under neutral conditions, the annualized funding rate should range between 5% and 10% to compensate for the cost of capital.
SOL perpetual futures annualized funding rate. Source: Laevitas
Data showing a 3% rate signals low confidence from bulls, although this remains distant from the extreme fear levels seen on April 7 when SOL prices plunged below $80. A negative funding rate indicates that shorts are paying to keep positions open, which is fairly unusual in cryptocurrency markets.
Q&A
What caused the 20% rise in Solana futures open interest this week?
The rise in open interest is attributed to a surge in demand for SOL futures following a ceasefire extension between the US and Iran and a general increase in market excitement.
How much has the price of Solana (SOL) increased recently?
Solana's price increased by 10% over five days, reaching a three-week high.
What factors could lead to Solana reaching $100?
Easing sell pressure from geopolitical events and a resurgence in memecoin activity are seen as potential catalysts for SOL's price rally towards $100.
What is the current market performance of Solana compared to its peers?
Despite SOL's underperformance against its peers, Solana maintains its market dominance in decentralized exchange (DEX) volume and total value locked (TVL).
