Solana’s native token, SOL, surged an impressive 22% on November 10. It showed a significant rise, exceeding the $ 54 limit for the first time since May 2022. This increase occurs amid continued sales of SOL tokens by FTX’s bankruptcy estate, with the Delaware Bankruptcy Court approving the sale of 55.75 million SOLs in September 2023. Meanwhile, in addition to SOL, three other altcoins came to the fore with their rise. Here are the details…
Why is Solana (SOL) rising?
Investor enthusiasm for SOL’s price increase is linked to the limited impact of the ongoing altcoin sell-off. Tokens from bankruptcy proceedings are either vested or locked up, and there is a weekly sales limit of $100 million as part of the FTX liquidation plan. As Trader Bluntz noted, once this selling pressure subsides, SOL could experience a significant pump. SOL’s price growth is not only driven by derivatives markets but is also fueled by the growth in deposits and decentralized applications (DApps) in the Solana ecosystem. Despite some concerns about sustainability, SOL’s current market cap of $22.8 billion exceeds Polygon’s, raising questions about valuation after the recent rally.
SOL’s significant weekly gains of 39% also impacted futures open interest. The amount of open positions increased to 745 million dollars. It recorded the highest level since November 2021, when SOL reached its record high of $260. Still, long and short leverage consistently match in futures markets. Therefore, it is important to examine SOL’s funding rate for a more “nuanced” perspective. A positive funding ratio indicates that longs (buyers) are demanding more leverage. The opposite occurs when shorts (sellers) require additional leverage, resulting in a negative funding rate. SOL’s current futures funding rate represents a weekly cost of 0.5% for long-term leverage.
Terra (LUNA) also experienced an increase
On the other hand, Terra Luna (LUNA) continues the uptrend wave among Layer 1 tokens. Along with SOL and Avalanche, LUNA is also on the rise. Because it tested the levels last seen in June. The altcoin recorded an intraday high of $0.874, marking an almost 90% breakout. While momentum indicators show LUNA is overbought, its upward trajectory indicates the potential for further gains. Rising net volume supports the bullish outlook, while increased buying pressure indicates strong interest in the asset.
However, caution is advised as an overbought asset may soon see a correction. In such a scenario, Terra Luna’s price could decline with potential support levels at $0.742 and $0.561.
“Sam Coins” are at the rally!
Coins including Solana (SOL), collectively known as “Sam Coins,” also rose. Besides Solana, Serum (SRM) and FTX token (FTT) made significant gains. FTT is up 100% in the last 48 hours. This rise is notable given FTX founder Sam Bankman-Fried’s recent legal troubles, in which he was found guilty of seven counts of fraud and money laundering. Despite the legal challenges, the tokens have seen an increase in trading volume, indicating strong buyer interest.
Ripple (XRP) lawyer John E. Deaton sees the rise of FTT as a kind of “atonement” for Sam Bankman-Fried’s mental ordeal. The founder’s second hearing on foreign bribery charges is expected to be held in March 2023. The odds appear to be in the prosecution team’s favor. However, the defendant’s stance was weakened by the statements of his close colleagues.
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