Data shows the Solana perpetual futures Open Interest has surged past $7 billion, a sign that speculative participation in SOL is on the rise.
Now, here is the chart shared by Glassnode that shows the trend in the Solana perpetual futures Open Interest over the past year:
As displayed in the above graph, the Solana Open Interest has observed an increase alongside the asset’s push above the $200 mark and has crossed the $7 billion milestone. “Market participation is clearly expanding,” notes the analytics firm. Historically, speculative activity going up in the sector hasn’t been anything unusual during price rallies, as investors tend to find such periods to be exciting, so they become more prone to making moves.
Given that the Solana perpetual futures Open Interest has shot up recently, it’s possible that the price could face instability owing to potential liquidation squeezes. Which way the resulting volatility might take the cryptocurrency in comes down to which side of the market is more dominant.
As the chart below shows, the Solana Funding Rate has been positive recently, indicating that the investors have been betting on a bullish outcome.
This could imply that a squeeze may be more probable to affect the long side. Interestingly, though, the Funding Rate hasn’t seen any increase alongside the surge in the Open Interest, a sign that new short and long positions have come in equal parts. “This suggests the build-up is not excessively leveraged, leaving scope for further upside if momentum persists,” explains Glassnode.
Solana has pulled away from the rest of the sector during the past week with a surge of almost 7% that has taken its price to $224.
