Sol’s rally towards $100 fizzles as Solana competitors rise

The key takeaways

• SOL’s derivatives show a negative sentiment, as the funding rate has hit zero and options to sell are traded at a higher price.

• Hyperliquid is the main competitor to Solana in the sector of perpetual contracts, despite Solana’s leadership in DEX.

Solana native token SOLSOL( ) suffered a 3 day 11% drop after a Monday peak of $97.70. After Thursday’s drop to $87, 25 million dollars in leveraged positions were liquidated. This negatively affected trader confidence. SOL derivatives indicate a fear of further decline and lack of confidence from bulls. This increases the chances of testing the $80 mark again.

SOL perpetual-futures annualized funding rates were near zero on Thursday. This indicates a lack in demand for longs. The bears have been dominating the leverage market for the last month. This is unusual in crypto markets, where traders tend to be optimistic. The funding rate is usually around 9% in neutral conditions due to the cost of capital, exchange risk and other factors.

SOL Options Markets confirms that professional traders don’t feel comfortable with the idea that $87 is a level that will be held for very long.

Delta skew increased by 12% to Thursday. This means put options are now trading at a premium to call equivalents. Even though SOL is trading 70% below its high, whales and market-makers aren’t comfortable with a downside exposure. This bearishness is partly explained by the weaker demand in the industry of decentralized applications.

Solana DApps revenues dropped to their lowest level for 18 months, at $22 millions. This is down from $36 million just two months earlier. DApps revenues at BNB Chain also fell by 52% during the same time period. However, increased competition is to blame. perpetual contracts trading Hyperliquid is the dominant player in this industry.

Solana is the leader of all leaders in decentralized exchange In synthetic derivatives, however, this situation has been reversed. Blockchains that are specifically created to deal with perpetual contract trading such as Hyperliquid Edgex Zklighter Aster and Aster account for more than 80%.

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SOL Price Recovery Delayd by Weak Onchain Data and Bearish Derivates

Officially licensed launch S&P 500 Index perpetual futures The contract for Hyperliquid is likely to have contributed to a weaker demand. Trade developed the product, which is available to eligible users outside the United States.[XYZ] The tokenized equity markets now total $1.1 billion.

SOL’s $51 billion current market capitalization is 42% lower than that of competitor BNB.BNB(88 Billion Dollars). BNB Chain’s TVL is $5.7 Billion, while Solana Network has $6.9 Billion. According to DefiLlama information, Solana paid $20.8 in network fees for the first 30 days, while BNB Chain paid $9.1 million.

Multiple companies, including Forward Industries (FWDI US), DeFi Development Corp., (DFDV US), and others, have underperformed in SOL. This has added to the negativity. The lack of excitement in the derivatives market and weakness in Solana’s onchain suggest that it will be longer before a bull-run above $110 is achieved.