What Factors Are Driving the Increase in Solana’s Price This Week?

Solana’s 40% Price Surge

The price of Solana (SOL) has experienced a remarkable 40% surge this week, reaching a new 2023 high at around $58, making it the best weekly performance since January 2023.

  • Factors contributing to the gains include a general uptrend in the cryptocurrency market.
  • Bitcoin ETF euphoria and an increasing appetite for risk have played a significant role.

FTX-Dump Fears Fail to Shake Solana Bulls

Solana’s rise coincides with the daily selling of 250,000-750,000 SOL tokens by the FTX bankruptcy estate over the last two weeks.

The limited impact of these sales, combined with some tokens being vested or locked and a weekly sale limit of $100 million, has transformed initial fears into investor enthusiasm.

Solana-focused funds, a key indicator of institutional flows in the SOL market, witnessed inflows worth $10.80 million in the week ending Nov. 3, according to CoinShares.

Bitcoin ETF Euphoria and Cryptocurrency Uptrend

Bitcoin ETF euphoria is a primary driver of the overall uptrend in cryptocurrency prices, with Solana emerging as the best performer in the past 30 days.

Solana Open Interest and Funding Rate

Solana’s futures open interest reached around $772 million on Nov. 11, the highest since November 2021, indicating increased interest and potentially greater liquidity in the market.

The rising open interest coincides with increasing funding rates, with a positive funding rate suggesting strong bullish sentiment in the market.

Earlier this week, SOL’s funding rate increased to 0.035% per eight hours, representing a 0.735% weekly cost for leverage longs and indicating a higher appetite for leveraged longs among investors.

SOL Price Technical Breakout

Solana’s gains this week are part of a bullish breakout, with SOL’s price breaking above the horizontal trendline resistance of its ascending triangle channel two weeks ago.

If the ascending triangle bottom reversal plays out, the upside target for SOL price before the end of the year is around $90, up 50% from current levels.

However, the bears may find hope in the weekly relative strength indicator (RSI), which is now at its most overbought level since September 2021, suggesting a potential correction towards the triangle’s upper trendline near $30.

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