Throughout the previous week, Solana [SOL] has witnessed a consistent upward trend. Currently, Solana is valued at $146.88, reflecting a 7.01% surge compared to last week.
Prior to this positive momentum, SOL experienced a prolonged decline, hitting a low of $120. Nevertheless, it has since rebounded to reach a high of $152.
Despite these recent gains, Solana still stands 43% lower than its all-time high of $259.96. This indicates a significant gap and raises inquiries about the potential for a sustained recovery and the key factors fueling this improvement.
Accordingly, experts at HyblockCapital have attributed the recent rally to a surge in buying pressure, particularly highlighting the influence of spot CDV and Perp CVD.
Current Market Sentiment
According to HyblockCapital’s assessment, the surge is primarily fueled by increased buying interest, especially among spot buyers.
The analysis suggests that the real demand for SOL tokens is the driving force behind the price surge. This underscores the dominant role of spot buyers in pushing the altcoin’s value upwards.
However, the analysts have also noted a divergence in Perp CVD, indicating a different trend among perpetual futures traders.
When spot buying drives prices up while Perp CVD shows a decreasing or stagnant trend, it implies that futures traders are not as optimistic as spot traders.
Given that spot CVD is the primary catalyst, the price surge is being predominantly fueled by genuine demand for SOL, hinting at the potential for a sustained rally.
Insights from SOL Charts
The metrics highlighted by HyblockCapital paint a positive picture for Solana’s potential rally, especially when considering the existing market conditions, indicating the potential for further price gains.
For instance, Solana’s Dydx exchange funding rate has maintained a positive trend over the last four days, indicating that long position holders have been paying funding to short position holders.
This favorable funding rate suggests bullish market sentiment with a higher demand for long positions.
Moreover, the positive funding rate across exchanges further supports the inclination towards long positions, as holders are willing to pay a premium to maintain these positions.
Over the same period, liquidation for short positions has surged, while that for long positions has declined significantly. Short position liquidations peaked at $8.65 million, contrasting with a low of $185.7k for long positions.
This trend implies that investors betting against the market are being compelled to exit their positions.
In essence, there is a notable shift in market sentiment regarding Solana. The increased demand for Solana, particularly for long positions, signifies a positive outlook.
With the optimistic market sentiment in play, SOL appears poised for further price appreciation. If the current conditions persist, SOL is likely to target the $160 resistance level in the short term. Subsequently, a breakthrough at this level could pave the way for SOL to challenge the $185 resistance barrier.