Despite a recent 11.3% correction in SOL’s price, the token maintains a strong position with healthy derivatives markets and on-chain metrics.
SOL experienced a 58.6% surge in just five days, reaching a high of $64 on Nov. 11. However, it retraced by 11.3% to $54 in the following two days, leading to concerns about its bullish momentum.
When compared to other altcoins, SOL has underperformed since its peak on Nov. 11. Avalanche’s AVAX rallied by 17%, Ether gained 1%, and BNB traded down 2%.
Despite the recent decline, SOL’s seven-day gain of 35% suggests that a bearish outlook may be premature. It’s important to consider SOL’s on-chain metrics and derivatives markets, as excessive leverage use could lead to forced liquidations.
The seven-day funding rate for SOL aligns with Bitcoin and ETH, indicating slightly higher demand for leverage longs. The 0.4% weekly cost is standard considering the growth of the cryptocurrency market.
Analyzing on-chain data carries risks, as metrics can be easily inflated. Solana’s TVL stands at $535 million, lagging behind Avalanche and Polygon.
The accumulation of fees for Solana does not justify significant future demand for SOL. Additionally, the regular issuance of SOL and the vesting schedule related to FTX and Alameda Research could impact the token supply.
Solana’s emergence in the NFT market has been notable, but it has not attracted the highest-value items and whales like Ethereum has.
The recent correction in SOL’s price may indicate investors’ concerns about its market capitalization compared to its peers.
Summary:
– SOL experienced a significant surge followed by a retracement in price.
– SOL has underperformed compared to other altcoins.
– On-chain metrics and derivatives markets should be considered.
– Solana’s TVL lags behind competitors.
– The accumulation of fees does not justify significant future demand for SOL.
– Solana’s position in the NFT market is notable but still lags behind Ethereum.
– The recent correction in SOL’s price may reflect concerns about its market capitalization.
