Solana's open interest hits a record high, can SOL break the $200 mark?
SOL has been incredibly strong this week, surging 22.5% between November 5th and 7th, reaching a seven-month high. Not only SOL, but other altcoins also followed suit, with Bitcoin hitting a historical high and altcoins rising by 17%.
Why is it rising so aggressively? Part of the reason can be attributed to Trump winning the presidential election, and the Republican Party controlling the Senate, which may lead to more lenient regulations in the cryptocurrency space in the future.
As the demand for SOL surged, leveraged positions also increased. On November 7th, the total open interest in Solana futures reached an all-time high. Although the risk of forced liquidation increased during price corrections, derivative data still indicates potential for further gains.
On that day, the open interest in SOL futures suddenly reached 21.1 million SOL, an 11% increase from the previous week, with a notional value reaching a new high of $4 billion. This indicates that SOL derivatives are becoming increasingly popular, and institutional interest is growing, but risks are also increasing.
Large futures positions may attract attention, making the whales targets for those looking to profit from short-term market fluctuations. However, in the derivatives market, longs and shorts are always balanced, and the financing rate can indicate which side is leveraging.
Currently, the 8-hour SOL financing rate is 0.017%, approximately 1.5% for a month, and market sentiment is relatively neutral to bullish. Generally, when the market gets excited, the cost of long leverage can rise to 2.1% or even higher. The current low rate indicates that market sentiment is quite mild, and there may still be further increases.
On-chain indicators are also strong, all supporting the continued rise of SOL prices. Some believe that the rise of SOL is due to memecoins, such as the issuance of Pump.fun tokens and platforms like Raydium decentralized exchange becoming popular because of memecoins. However, other developments within the Solana ecosystem may push SOL prices to $200 or even higher.
Recently, I plan to position for a potential explosive coin that can easily double in value, while also looking for some promising coins to hold until the end of the year, expecting a return of more than ten times is not a problem. If you want to keep up, leave a message, follow, like, and share for free.
