Originally published on: November 07, 2024
In a remarkable turn of events, Solana’s native token, SOL, experienced a surge of 22.5% between November 5 and November 7, hitting a seven-month high of $197.72. This surge coincided with a broader uptrend in altcoin values, with Bitcoin also reaching a new all-time high of $75,854 on November 7.
The recent bullish momentum in the cryptocurrency market can be attributed to the election of President-elect Donald Trump and the Republican party’s majority control of the Senate, signaling potential favorable regulatory changes for the crypto sector.
As demand for SOL continues to rise, leveraged positions in Solana futures have reached an all-time high, indicating strong investor interest in the token. Despite the risks associated with leveraged trading, derivative data suggests the potential for further upside in SOL’s price.
With aggregate open interest in Solana futures hitting a record high of 21.1 million SOL on November 7, valued at $4 billion, the market is witnessing a surge in SOL derivatives adoption. While this signals growing institutional interest in SOL, it also raises concerns about potential risks associated with large futures positions.
Looking at the funding rate for SOL futures, which currently stands at 0.017%, indicating neutral-to-bullish sentiment, there is room for further price growth in SOL. Typically, during periods of high market excitement, the leverage cost for long positions can increase, but the current rate suggests moderate optimism for a continued upward trend.
While some analysts attribute SOL’s recent gains to memecoins, the underlying strength of the Solana ecosystem, including factors like total value locked (TVL) reaching $6.64 billion and significant growth in various sectors beyond memecoins, suggests a more sustainable basis for SOL’s price rally.
Despite concerns raised by critics about potential market manipulation and regulatory scrutiny, the overall outlook for SOL remains positive, with strong onchain metrics and robust derivatives data supporting the network’s competitive advantages and the potential for even higher SOL prices in the future.
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