Solana (SOL) Price Eyes $200 Rally as Open Interest surges by $150M

Insights:

Solana (SOL) price peaked at $185 on April 8, rising 10% over the last 72-hours, as bullish tailwinds from the positive non-farm payrolls report last Friday, pushed the crypto sector and other risk assets into an upward trajectory.

After double-digit gains in the last 3-days, forward-looking data from Solana derivatives markets shows majority of traders are betting on further upside.

What are the chances of SOL price breaking above $200 in the coming days?

Non-Farm Payrolls Report Sparks Crypto Market Recovery.

The latest Non-Farm Payrolls report  released on April 5, has bolstered investor confidence in the crypto sector. Since it was released, the global crypto market capitalization has increased by over $120 billion at the time of writing on April 8.

And as expected mega-cap layer-1 coins like Bitcoin (BTC), Ethereum (ETH) and SOL prices have been at the fore front of the market recovery.

Solana price has been on a steady upward trend in each of the last 3 trading days since April 5, This 10% upside comes after a significant 17.82% pull-back last week, which saw SOL briefly tumble below $170 for the first time since March 20.

Solana Speculative Traders Bet $150M on Further Upside

Looking beyond the price charts, recent activity observed in the derivatives markets suggest that majority of Solana speculative traders are betting on the current uptrend to continue in the near-term.

Santiment’s Open Interest data represents the total dollar value of all active futures contract positions currently listed for a specific asset.

The chart above shows that, since the price rally began on April 5, Solana Open Interest has grown by $150 million to hit $2.2 billion mark at the time of writing on April 8.

Notably, this 15% surge in Open Interest has outpaced the 10.5% price increase during that period. When open interest increases at a faster rate than spot prices, strategic investors interpret it as a bullish signal for a few reasons.

Firstly, the disparity between the surge in open interest, which rose by 15%, and the price increase of 10.5% suggests a influx of fresh capital into the Solana market. This uptick in open interest signifies growing participation from traders and investors, indicating heightened market activity and interest in the asset.

Secondly, the disproportionate growth in open interest relative to price suggests that investors are positioning themselves for further price appreciation. This divergence may indicate that traders anticipate continued bullish momentum in Solana, prompting them to open new positions or increase their exposure to the asset in anticipation of future gains.

SOL Price Forecast: All Eyes on $200 target

The $150 million surge Solana open interest suggests an overwhelming conviction of an imminent rally to retest the critical $200 price resistance level again.

Solana price broke above $200 mark multiple times in March 2024, but failed to establish a steady support level above the milestone territory. The Bollinger band upper limit shows that SOL face stiff resistance at that range once again.

But looking at the SOL relative strength index (RSI) which is currently trending at 53.85, Solana markets are still some distance away from overheated territories. This could encourage new buyers to enter the market in the days ahead.

But on the downside, in event of another major correction the lower-limit Bollinger band at $170 could provide short-term support for the bulls to regroup.