- SOL has rallied 22% despite ongoing FTX sales, as their impact is limited by vesting schedules and a weekly sale cap.
- Bullish leverage trading has emerged, with SOL futures showing a 0.5% weekly funding rate for longs, a shift from recent short dominance.
- Solana ecosystem activity is growing, with a 10% gain in total value locked and 28% more active DeFi addresses, ranking it 4th overall.
Solana‘s native token SOL has seen a remarkable 22% price surge, breaking past $54 for the first time since May 2022. This rally comes despite ongoing selling pressure from FTX’s bankruptcy proceedings. What factors are driving investor enthusiasm for SOL?
Limited Impact of FTX Sales
The initial fear of major token dumping from FTX has faded as investors realize the limited impact of these sales. Some tokens are vested or locked, and there is a 100 million weekly sale limit. As one analyst noted, SOL’s resilience amid the FTX sales is impressive, suggesting strong potential once the seller is gone.
Bullish Leverage Trading
SOL futures currently show a 0.5% weekly funding rate for leverage longs, indicating solid bullish momentum without excessive leverage demand. This marks a shift from a few weeks ago when shorts were paying more for leverage.
Growth in Solana Ecosystem Activity
Beyond derivatives, the Solana ecosystem shows fundamental growth. Solana’s total value locked has reversed its six-week decline with a 10% gain in three days. Active DeFi addresses are up 28%, ranking Solana #4 despite competitors declining.
Valuation Concerns Emerge
Despite the positives, SOL’s $228 billion market cap is nearly 3x that of Polygon, despite comparable fundamentals. Solana’s accumulated fees also lag far behind BNB Chain. While the trend remains bullish, this hints at limited further upside.
Conclusion
A mix of factors, from leveraged trading to ecosystem growth, are fueling SOL’s rally. However, the token’s high valuation compared to some competitors raises doubts about sustainability.
