In a noteworthy development, Solana (SOL), a prominent competitor to Ethereum in the Layer-1 space, has displayed a stellar performance among altcoins, surging by an additional 17% to reach $55 in a significant rally. This surge has propelled Solana’s weekly gains to 35%, with an astounding monthly increase of 150%.
The FOMO (Fear of Missing Out) sentiment is palpable as SOL’s price has thrived since September. With the current rally pushing the SOL price beyond the 2021 resistance of $53 to $55, some investors speculate that Solana could potentially witness another 10-15% increase, reaching $61.
However, amidst the excitement, a crucial question emerges: Can the Solana price rally be sustained in the future? Analysts caution against hasty decisions, advising investors to refrain from entering the market at the current juncture.
Well-known crypto trader JACKIS highlights a prevailing trend where investors are increasingly chasing $SOL at its current $54 valuation, overlooking the opportunity when it was priced at $17. Despite being a strong long-term supporter of SOL, the trader advises against entering the market during a streak of ten consecutive weekly green candles. Instead, they suggest waiting for a significant correction, possibly a substantial shake-out, and then considering market entry during subsequent weekly red candles.
Solana’s Elevated Funding Rate Not in Critical Danger Zone
Examining on-chain data reveals that Solana’s funding rate is high but not yet in the danger zone. Despite SOL surpassing $54, its highest point since May 2022, the funding rates, while elevated, have not reached a critical level.
In a scenario reminiscent of Chainlink, the Grayscale Solana Trust (GSOL) is trading at a notable premium, currently at 4x or a 300% premium to the spot price. GSOL shares are trading at $202, significantly higher than the spot price of around $55.
On November 10, GSOL share prices surged by 61%, surpassing the $200 level, marking an over 800% increase since the beginning of the year. This surge underscores substantial institutional involvement in Solana, offering valuable insights for potential buyers navigating the dynamic crypto market landscape.