The majority of cryptocurrency market participants did not anticipate Solana’s strong price performance. Given the enormous pressure the asset faced following the FTX implosion and the massive amount of coins in circulation, we should not be seeing the price movement we are seeing right now. However, there are a few reasons for this.
According to funding rates and trading volumes, all of the aforementioned factors did not go unnoticed, as the majority of traders and investors passed over Solana, not considering it as a potential investment.
However, because no selling pressure is provided by mid- or long-term Solana holders, the lack of social recognition and low funding rates are usually continuation indicators. The situation will change as social indicators in the vicinity of SOL rise, indicating a return of potential sellers to the market.
Low funding rates indicate a lack of liquidity and, in many cases, a decrease in market volatility. On the other hand, unusually high funding rates raise the prospect of an impending volatility spike in either direction. In the case of Solana, rates are at a moderate level, enough to reintroduce volatility to the market without causing too much trepidation, which would result in a rapid price reversal.
Unfortunately, both funding rates and social recognition of SOL are cyclical indicators that will reach extreme levels if the market rally continues. But, at the same time, neither of the aforementioned indicators tell us anything about Solana’s long-term market prospects. Millions of coins are still in circulation and could be sold on any given day. News about Solana
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