Critical development in Solana (SOL): How does it affect the price?
In the last 48 hours, Solana's funding rate fell by 81 percent, causing fear in investors. Positive funding rates usually indicate that long (bullish) positions dominate the market and traders have a positive approach to the pair. However, the decrease in this rate shows that investors expect a pullback and short (bearish) transactions are preferred more.
Although the funding rate remains positive, this rapid decline is quite striking. Traders are hedging (balancing transactions) against the risk of a possible downward pricing. For traders, this shows that the short-term outlook of the market is bearish. Indeed, this development increases uncertainties about Solana's future direction.
Solana's active address count fell to its lowest level in December, indicating that user interest is decreasing. Lower activity levels are usually associated with decreased liquidity. The decline in active addresses, which could increase price volatility and hinder network adoption, is a worrying signal for traders and investors.
As of writing, Solana’s price is trading at $219 and is trying to turn the $221 band into a support level. If SOL cannot maintain $221, it is expected to pull back to the $200 band. Persistence above $221 could push the $SOL SOL price to $245.
On the other hand, Solana has officially launched its first global online AI hackathon, which will be held from December 10-23, 2024. The event, supported by venture capital fund ai16z and the Solana Foundation, covers a variety of areas such as AI infrastructure, token tools, autonomous chatbots, and social/influencer agents.
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