"Futures liquidated, but price rebounds"...What's the secret to Solana (SOL) recovering $80?

▲ Solana (SOL)

According to the cryptocurrency specialized media BeInCrypto on July 7 (local time), Solana traded around $82 on July 4, with open interest at approximately $2.41 billion and a funding rate, indicating a bias towards long positions in futures, at 0.009%. Subsequently, during the market downturn, leveraged long positions were liquidated, pushing the price down to about $79.72 on July 6, a decrease of approximately 3%.

Open interest then decreased to about $2.2 billion, and the funding rate also dropped to 0.004%. However, Solana recovered to $80.84. BeInCrypto analyzed that this price rebound, despite decreasing open interest, suggests that spot demand is supporting the price more than futures buying relying on borrowed funds.

The behavior of long-term holders also changed. The supply share of investors holding Solana for 1 to 2 years increased from 14.64% to 15.60% since June 29. Looking at the supply distribution by holding period, these investors acquired additional Solana without selling during price fluctuations, recording the largest accumulation in recent weeks.

Network funds also increased rapidly. Solana's Total Value Locked (TVL) increased by approximately 10%, from $4.66 billion on June 26 to approximately $5.11 billion on July 4, reaching its highest level since early June. While open interest decreased, TVL continued to rise and maintained a high level even during the price decline. The supply of Solana-based stablecoins is also approximately $15.6 billion, close to the peak of approximately $16 billion recorded on July 3.

Solana rose by more than 9% on a weekly basis. BeInCrypto diagnosed that the recent uptrend, based on the combined trends of reduced leverage, accumulation by long-term holders, and increased TVL, is driven by network deposits and long-term investor buying rather than excessive buying in the futures market. It presented TVL and long-term holder fund flows as key indicators to monitor future trends.

[Key Article Summary]

-Solana's Total Value Locked (TVL) increased by 10% from $4.66 billion to approximately $5.11 billion, reaching its highest level in 5 weeks.

-Open interest decreased from $2.41 billion to approximately $2.2 billion, but Solana's price recovered to $80.84.

-The supply share of long-term holders (1 to 2 years) increased from 14.64% to 15.60%, showing the strongest accumulation trend in recent weeks.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*