Solana‘s price has surged over 40% this week, reaching a new 2023 high of $58. This development marks Solana’s best weekly performance since January 2023. Several factors, such as the overall bullish trend driven by the <a href="https://en.coin-turk.com/sleeping-bitcoin-whale-stirs-after-a-decade-implications-for-the-crypto-market/”>Bitcoin ETF hype in the crypto market and increased risk appetite among investors, have contributed to this gain.
Why is Solana Price Rising?
Solana’s recent surge coincides with daily sales of 250,000 to 750,000 SOL tokens by FTX, which had recently faced bankruptcy. This has restored investor confidence. The Delaware Bankruptcy Court had approved the sale of 55.75 million SOL tokens in September 2023, causing a price drop. However, the limited impact of these sales due to locked tokens and a weekly sales limit of $100 million has turned initial fears into excitement among investors.
According to data from blockchain analytics platform CoinShares, Solana-focused fund investments witnessed an inflow of $10.8 million during the week ending November 3, highlighting the institutional interest in the SOL ecosystem.
The Bitcoin ETF hype in the markets, led by Bitcoin’s rise towards $38,000, is one of the main reasons behind the overall surge in cryptocurrency prices. However, Solana has been the best-performing crypto asset in the past 30 days.
Solana Momentum in the Futures Market
Solana’s open interest (OI) in the futures market reached approximately $772 million on November 11, hitting its highest level since November 2021 when SOL reached a record high of $260. This indicator signals increased investor interest and potentially more liquidity in the markets.
Alongside these developments, the rising OI level in Solana coincided with increasing funding rates, which are fees paid from one side of the futures market to the other every 8 hours. The funding rate on the SOL side rose to 0.035% earlier this week. This funding rate represents a weekly cost of 0.735% for long positions in the futures market, indicating a strong upward trend in the market.
The combination of rising OI and funding rates suggests a greater appetite among investors for long positions in the futures market. In summary, many futures traders expect the SOL rally to continue in the coming days.
