Key points:
Solana gains 8% to $152, with 35% higher trading volume and a 5% rise in futures open interest, showing strong demand.
Solana’s TVL up 25% in 30 days, DEX volumes soar 90%, led by Sanctum, Raydium, and others.
A V-shaped recovery eyes $250 if SOL price breaks $160-$200 resistance.
Solana (SOL) displayed strength on May 1, climbing 8% from its April 30 low of $140 to around $152 at the time of writing. Its daily trading volume has jumped by 35% over the last 24 hours.
Rising futures OI boosts SOL price
An increase in open long positions in the futures market preceded SOL’s rally above $150 today.
SOL futures open interest climbed 5% over the last 30 days to 38.7 million SOL on May 1. In dollar terms, this represents $5.86 billion in futures positions, ranking third in the cryptocurrency market and over 50% higher than the demand for XRP derivatives.
Also backing Solana’s upside are positive funding rates in its perpetual futures markets. Funding rates represent the periodic payments exchanged between long and short positions. This metric has flipped positive from -0.005% on April 30 to 0.007% at the time of writing.
Increasing OI and positive funding rates mean more capital is entering the market, which can boost the price increase as buying pressure builds up.
Solana onchain activity is back
Solana ranks as the second-largest layer-1 blockchain with more than $8 billion in total value locked (TVL) on the network, according to data from DefiLlama.
The chart below shows that Solana’s TVL has increased by approximately 25% over the last 30 days.
Sanctum was among the strongest performers in Solana deposits, with the TVL rising 40% over the last 30 days. Other notable increases included Kamino (24%), Jito (20%), and Jupiter (19%).
Solana’s daily DEX volumes have increased by more than 90% since April 11 to $3.14 billion. Solana led the past week with $21.6 billion in decentralized exchange activity, surpassing the entire Ethereum layer-2 ecosystem.
High performers within the Solana network include a 63% weekly increase in Raydium’s volumes and a 40% rise in Lifinity activity.
Related: Bloomberg Intelligence boosts Solana ETF approval odds to 90%
Solana follows V-shaped recovery
SOL’s price action has been painting a V-shaped recovery pattern on the weekly chart since January, as shown below.
A V-shaped recovery is a bullish pattern formed when an asset rises sharply after a steep decline. It is completed when the price moves up to the resistance at the top of the V formation, also known as the neckline.
SOL appears to be on a similar trajectory and now trades below a supply-demand zone between $160 and $200, where the 50-day simple moving average (SMA) sits.
The bulls need to push the price above this area to increase the chances of reaching the neckline at $250 to complete the V-shaped pattern.
Beyond that, the next target would be the all-time highs above $294. This would represent a 92% increase from the current price.
The relative strength index has increased from 36 at the end of March to 47 at the time of writing, suggesting the bullish momentum is picking up.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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