Solana Price Analysis: SOL Flips XRP Market Cap  —$100 Next Target?

Insights:

• Solana (SOL) price crossed $84 on Wednesday, Dec 20, hitting a new peak for 2023. 
• Solana’s market capitalization has now hit $34 billion leapfrogging Ripple (XRP) to claim 5th position in the global crypto rankings. 
• In the derivatives market, SOL LONG/SHORT ratio has hit a 30-day peak of 1.07 signaling that most traders are betting on further price gains. 

Solana (SOL) price crossed $84 on Wednesday, Dec 20, bringing its total market capitalization above $34 billion, $1 billion more than Ripple (XRP). Derivatives data analysis highlights how SOL traders are doubling down on their bullish positions following the latest price breakout. 

Will this high-risk approach propel SOL price toward $100, or set the stage for a pull-back? 

Solana Market Cap Flips XRP to Claim 5th Position on the Crypto Rankings 

Solana broke some historic records following another double-digit growth performance on Wednesday Dec 20. Firstly, SOL price hit a new 2023 peak of $84 to replace Avalanche (AVAX) to emerge the best performing asset in the top 10 crypto market rankings over the last 7-days, but there’s more. 

In a more eye-catching fashion, Solana market capitalization crossed $34.4 billion, leapfrogging Ripple (XRP) to become 5th most-valuable cryptocurrency asset. 

The Santiment chart above shows that the last time Solana market cap was higher than XRP, was back in April 2022. But since then, Solana price has struggled having been embroiled in the multiple controversies.  

Solana network had suffered a series of network outages in 2022. And the Solana NFT ecosystem was heavily criticized for being a cesspool of rugs pulls. 

But chief of the issues that possessed significant concern for investors, what the embattled FTX exchange’s skewed exposure to Solana.

Court fillings in September confirmed that the defunct exchange held over $1.2 billion in SOL, which at the time was feared to be awaiting full liquidation to repay creditors. 

However, after FTX fund administrators were spotted moving SOL holdings into stalking contracts, it buoyed investors confidence that all of the SOL coins will likely not be liquidated in one fell swoop as initially feared.  

In effect investors have begun piling on capital into the Solana ecosystem as the crypto market rally began in mid-October. 

Derivatives Traders Are Doubling Down on their Positions 

Based on the data trends observed in the Solana derivatives markets SOL price looks set to enter further gains. According to crypto derivatives data tracking tool, Coinglass, majority of SOL traders were doubling down on their bullish SOL positions on Wednseday. 

The chart below illustrates that SOL LONG/SHORT ratio rose to 1.07 on Dec 20, the highest in the last 30-days. This affirms that traders are increasingly betting on the Solana price rally to rise to new peaks in the days ahead. 

The LONG/SHORT ratio is a derivatives trading metric that shows the proportion of newly opened positions that are bullist or bearish.

This ratio provides insights into market sentiment and the directional bias of traders. When the LONG/SHORT ratio is greater than 1, as observed above, it means more LONG positions were opened than SHORT during that trading period. 

Hence, SOL LONG/SHORT ratio hitting a 30-day peak of 1.07 on Dec 20 can be taken as an indication of a prevailing bullish sentiment. 

In summary, despite SOL price currently trading at a euphoric peak of $84, majority of traders are betting on an imminent $100 retest.