Although the price of SOL finds it difficult to rise above $200, derivatives and on-chain data indicate a robust market.
From March 24 to 26, Solana’s native token SOL saw a 12.8% growth; however, it thereafter saw a decline to $186.
Despite this, investors are still upbeat, pointing to the rise in activities on the Solana network such as memecoins and airdrops as important elements that can keep SOL on a good trajectory and possibly push its price above $200.
The cryptocurrency market is vulnerable overall, especially in light of the fact that on March 26th, Bitcoin was unable to maintain its over $71,000 level.
This setback is interpreted as a sign of declining investor confidence, particularly in light of the withdrawals from spot Bitcoin exchange-traded funds (ETFs).
The future of SOL and other alternative coins may become less optimistic if institutional investors continue to cut back on their holdings in listed crypto assets.
Recent legal moves by the U.S. Justice Department, which have launched criminal charges against KuCoin exchange and two of its founders, may put additional pressure on SOL’s price.
KuCoin is being charged by the U.S. Commodity Futures Trading Commission of providing unregistered and unregulated derivatives contracts to American customers.
The exchange, according to the prosecution, enabled transactions totaling more than $5 billion in “suspicious and criminal proceeds.”
Regulatory uncertainty and the short-term effects of Bitcoin’s spot ETF flows aside, the price of SOL often reacts positively to expansion within the Solana ecosystem.
Memecoins’ widespread appeal has contributed to the blockchain’s appeal to new initiatives, which has maintained demand for the SOL token due to the successful performance of Solana SPL tokens.
Significant improvements in user activity and volume are revealed by a 30-day review of the Solana network, challenging a negative position on SOL.
Based on current statistics, Solana’s lead over its immediate opponent, the BNB Chain, has significantly decreased.
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It is impossible to predict how the market will react to tighter regulations and the movements of spot Bitcoin ETFs; instead, investors can use derivatives trading measures to get a sense of how the market is feeling.
In particular, insights can be gained from the behaviour of perpetual contracts, often known as inverse swaps.
An embedded rate is a part of these contracts in order to balance debt. Interestingly, a negative rate indicates greater short seller demand.
“Despite SOL’s inability to breach the $195 barrier on March 26, the notable surge in demand for bullish positions underscores resilience, urging a closer examination of China’s stablecoin market for broader market sentiment validation.”
This is due to the fact that this kind of demand acts as a barometer for the movements of regular investors both inside and outside of bitcoin marketplaces.
When comparing USD Coin (USDC) transactions to the official U.S. dollar rate, the premium is very significant.
The USDC premium in China remained above 3% on March 26, suggesting that there is a high demand for exchanging local CNY for the USDC stablecoin.
This pattern points to continued interest in cryptocurrencies in China, which validates the upbeat assessment of SOL’s derivatives markets.
While the exact moment SOL will cross the $200 barrier is still unknown, the existing on-chain and derivatives measures point to a stable market.
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