🚀 AMBCrypto: $SOL Futures Market Performance
AMBCrypto’s assessment of the activity on SOL’s futures market revealed a steady hike in bearish sentiments since the beginning of the month.
Firstly, the coin’s futures open interest, which measures the total number of futures contracts that have yet to be settled or closed, has trended downward since 1st April.
At $2.88 billion as of this writing, SOL’s futures open interest has dropped by 20% since the beginning of April, per Coinglass data.
When an asset’s open interest falls in this manner, it suggests that market participants are exiting their trading positions without opening new ones.
Although its funding rate across cryptocurrency exchanges remained positive, it had declined by almost 90% since 1st April and was spotted at a 60-day low at press time.
The decline in SOL’s funding rate is noteworthy as it suggests the demand for long positions is waning. It signals that long traders are exiting their positions primarily for profit.
When long traders start to pull back like this, it means that the market is becoming overheated. It also suggests that bullish momentum is weakening.
This often leads to a drop in buying pressure, eventually resulting in a decline in the underlying asset’s price.
