The main dishes to remember:
Sol (soil), the indigenous cryptocurrency of Solana, faced a strong rejection at the level of $ 158 on Monday. The subsequent drop to $ 143 by Wednesday marked a loss of 14% over seven days. Merchants are now afraid that the chances of recovering the level of $ 200 have decreased, while the demand for soil positions with leverage increased in the middle of the recent low prices.
On Wednesday, an open interest on soil term contracts reached 45.7 million soil, an increase of 19% compared to the previous month. Although each long (buyer) is equal to a short (seller), the intensity of the lever effect on each side can differ. These pending posts are now estimated at $ 6.7 billion, which makes it crucial to assess which part was more aggressive.
Will the soil approval ETF approval ratings lead to price services?
Funding rates on perpetual term contracts serve a key measure to understand the feeling of the market. Under neutral conditions, the annualized financing rate should drop between 5% and 15%, which indicates that long positions pay a premium to maintain open transactions. When the markets become lowering, this rate tends to drop below this beach.
On Wednesday, the soil financing rate fell to 0%, suggesting a growing appetite for lowering positions. More importantly, this indicator has failed to stay above the annualized threshold of 15% in the last three months, reflecting a broader lack of confidence among the bulls. Even the rally at $ 185 in mid-May did not trigger a renewed interest in long artisanal.
Although leverages are not strictly required for Sol to recover the $ 200 mark, a significant change in investors’ perception is essential. In the absence of renewed confidence, the market can continue to deal with the sales pressure. The soil performance remains closely linked to the activity of the network on Solana, which has stagnated in the last three months after a record in January.
The total locked value (TVL) on the Solana network has remained stable at almost $ 10 billion, while weekly income from decentralized applications (DAPP) fell below $ 40 million. For comparison, these DAPPs have generated more than $ 100 million per week between mid-November and mid-February.
The recent drop in soil also reflects over-type excitation fueled by the same activity, especially after the launch of the official Trump token (Trump) on Solana. This took merchants off guard because the previous efforts of companies aligned with President of the United States Donald Trump had largely favored Ethereum.
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The potential approval of a fund negotiated by Sol Spot (ETF) by the American Commission for Securities and Exchange is considered the most important short -term catalyst for the token. However, analysts argue that Sol should benefit even more from the long -term growth of tokenized titles on Solana’s blockchain, according to a research report on the actions of Cantor Fitzgerald.
Analysts would say that Solana is “significantly better than Ethereum on each metric” and expects a growing number of companies to adopt soil as a treasure ratio. They indicate strong growth in developers and greater operational efficiency compared to the more complex layer 2 ecosystem of Ethereum.
Although the soil price target of $ 200 can appear out of reach on the basis of derivative data, growing institutional interests and the adoption of blockchain could quickly reverse the current market feeling.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
