Solana’s native token, SOL, has skyrocketed by an impressive 40% in the past week, reaching a high of around USD 58 in 2023, the largest increase since the beginning of the year.
This significant rise can be attributed to several contributing factors. Fears that FTX’s bankruptcy estate would sell between 250,000 and 750,000 SOL tokens per day had initially unsettled the market. However, these fears have been allayed by the fact that certain tokens are vested or locked and weekly sales have been capped at $100 million. As a result, the initial concern has turned into an encouraging prospect for investors.
The general upward trend of the market, driven by enthusiasm over Bitcoin’s rise towards $38,000, has also played a crucial role. Despite this broader market momentum, Solana has emerged as the top performer over the past month, eclipsing other cryptocurrencies.
In addition, open interest in Solana futures reached a notable high of around $772 million, indicating increased market interest and potential liquidity. The rising refinancing rates, where long positions are paid for short positions, also indicate a prevailing bullish mood on the market.
Technically, SOL’s price rise corresponds to a breakout move where the horizontal trendline resistance of the ascending triangle channel has been breached. Analysts see a potential upside target of around $90, which represents an increase of 50% from the current level.
However, caution is advised as the RSI indicator (Relative Strength Indicator) on a weekly basis currently shows the highest overbought level since September 2021, indicating a possible imminent correction with a possible pullback towards the upper trend line of the triangle at around $30.
This rapid price rise suggests a mixture of optimism and caution, with investors eagerly awaiting further potential for SOL’s price rise in the coming days.