Why is Solana price up this week?
Solana's price has surged by 40% this week, propelled by the alleviation of concerns related to FTX sell-offs and the increasing excitement around Bitcoin ETF discussions. Meanwhile, SOL/USD technical indicators suggest the potential for further upward movement.
Solana (SOL) has experienced a 40% surge in price this week, establishing a new 2023 peak around $58. This uptick represents Solana's strongest weekly performance since January 2023. Various elements have driven this growth, notably the overall bullish trend in the cryptocurrency market, spurred by Bitcoin ETF excitement and a general increase in risk appetite.
One factor contributing to Solana's rise is the sale of 250,000-750,000 SOL tokens daily by FTX's bankruptcy estate over the last fortnight. While there were initial concerns, these sales, limited by vested or locked tokens and a weekly cap of $100 million, have shifted fears into investor enthusiasm.
Institutional flows in the SOL market, as observed in Solana-focused funds, saw inflows of $10.80 million in the week ending Nov. 3. The Bitcoin ETF excitement, propelling Bitcoin towards $38,000, has been a key driver for the market's overall bullish trend, with Solana emerging as the top performer over the past 30 days.
Solana's futures open interest reached roughly $772 million on Nov. 11, the highest since November 2021. This surge in open interest points to increased interest and potential liquidity in the market. The rise in funding rates, indicating stronger bullish sentiment in the market, supports this narrative.
From a technical perspective, SOL's breakout above the horizontal trendline resistance of its ascending triangle channel two weeks ago suggests a bullish move. The target is projected to reach approximately $90, representing a 50% increase from current levels.
However, the weekly Relative Strength Index (RSI) is currently at its most overbought level since September 2021, suggesting a potential correction. Bears are considering a move towards the upper trendline of the triangle near $30, emphasizing the possibility of a corrective phase.