Expanding ecosystem and $1.86B futures open interest back Solana’s $250 target

Expanding ecosystem and $1.86B futures open interest back Solana’s $250 target

Derivatives data shows institutional demand remains strong for SOL, and on-chain data points to a rally to $250.

Solana (SOL) price is meeting resistance near its all-time high again, but solid fundamentals and the impressive growth of its decentralized finance (DeFi) and non-fungible token (NFT) ecosystem are likely to drive the altcoin above $250 before year-end.

SOL/USDT 1-day chart. Source: TradingView

Institutional investor interest is likely a key factor behind Solana’s impressive 490% gain since August. For example, SOL is the fourth largest Bitwise 10 Crypto Index Fund ($BITW) component, which overall is a $1.3 billion over-the-counter tradable market instrument.

Traders should remember that this event is not necessarily positive since futures contracts require both a buyer (long) and a seller (short). Nevertheless, the increasing interest allows even more substantial players to participate.

DeFi is gaining traction

Solana’s two most prominent decentralized finance projects are decentralized exchanges with built-in yield generation programs and they hold nearly $2 billion total locked value each.

Saber (SBR) is an automated market maker (AMM) protocol that trades between stable pairs and synthetic assets and provides yields for the platform’s liquidity providers. Meanwhile, Raydium offers a decentralized exchange, yield farming, and liquidity pools.

Evidence of institutional investors’ appetite for Solana was the $12 million weekly inflow in mid-October, as reported by

Data illustrates that the current number of tweets from unique accounts discussing Solana is 32% higher than the 30-day average. Tweet volume is one component of the VORTECS™ score that identified bullish conditions for SOL on Oct. 20.

As long as Solana’s ecosystem expands, the network remains a viable solution for DeFi and NFT applications looking for cheap and fast transactions. Both onchain and derivatives indicators signal that $250 SOL by year-end is totally feasible.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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