Tuesday, 5 December 2023

Crypto News

Why is Solana price up this week?

Why is Solana price up this week?

The price of Solana (SOL) has soared 40% this week to establish a new 2023 high at around $58

That is Solana’s best weekly performance since January 2023. Many factors have contributed to the gains, including a general cryptocurrency market uptrend led by Bitcoin ETF euphoria and growing appetite for risk overall.

Solana (SOL) weekly price chart. Source: TradingView

FTX-dump fears fails to shake Solana bulls

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

The Delaware Bankruptcy Court approved the sale of 55.75 million SOL tokens in September 2023. The limited impact of these sales, due to some tokens being either vested or locked, and a weekly sale limit of $100 million, has transformed initial fears into investor enthusiasm.

For instance, Solana-focused funds, one of the barometers to gauge institutional flows in the SOL market, witnessed inflows worth $10.80 million in the week ending Nov. 3, according to CoinShares.

Institution net flows across crypto funds. Source: CoinShares

Bitcoin ETF euphoria is one of the primary reasons for the overall uptrend in cryptocurrency prices, led by Bitcoin’s rise toward $38,000. Solana, however, has been the best-performer in the past 30 days. 

Top cryptos 7-day and 30-day performances. Source: Messari 

Solana open interest pops alongside funding rate 

Solana’s futures open interest reached a significant level of around $772 million on Nov. 11, the highest since November 2021, when SOL’s price had established its record high of $260. High open interest levels indicate greater interest and potentially greater liquidity in the market.​

Solana futures Open Interest. Source: Coinglass

Meanwhile, Solana’s rising OI coincides with increasing funding rates, a fee paid by one side of the perpetual contracts to the other every 8 hours. A positive funding rate typically means that longs (buyers) are dominant in the market, i.e., they’re paying shorts (sellers).

Earlier this week, SOL’s funding rate increased to 0.035% per eight hours. This funding rate represents a 0.735% weekly cost for leverage longs,…

Click Here to Read the Full Original Article at Cointelegraph.com News…