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A growing ecosystem and open interest in futures of $ 1.86 billion support Solana’s $ 250 price target

Solana’s (SOL) price finds resistance again near its previous all-time high, but strong fundamentals and impressive growth of its ecosystem of decentralized finance (DeFi) and non-fungible tokens (NFT) are likely to push the altcoin to exceed the $ 250 mark before the end of the year.

SOL / USDT 1-day chart. Source: TradingView

Institutional investor interest is likely a key factor behind Solana’s impressive 490% gain since mid-August. For example, SOL is the fourth largest component of the Bitwise 10 Crypto Index Fund ($ BITW), which as a whole is a market instrument valued at USD 1.3 billion.

DeFi is gaining relevance

Solana’s two most prominent decentralized finance projects are decentralized exchanges with built-in yield farming programs and have a total locked value of nearly $ 2 billion each..

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

A test of institutional investors’ appetite for Solana was the entry of $ 12 million a week in mid-October, CoinShares recently reported. That same week, FTX’s US subsidiary announced its expansion to the Solana blockchain, allowing users to trade, deposit and withdraw NFTs that conform to the Metaplex token standard.

Open interest in SOL futures reached an all-time high

This positive news flow has been reflected in Solana’s derivatives markets, as shown by the aggregate open interest data on the futures shown below:

Aggregate open interest in Solana futures contracts. Source: Bybt.com

The indicator reached a peak of USD 1.86 billion on October 25, representing an increase of 123% in 30 days. To put things in perspective, Cardano (ADA) and Polkadot (DOT) currently have an open interest in futures contracts of $ 900 million.

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Traders should remember that this event is not necessarily positive, as futures contracts require a buyer (long position) and a seller (short position). However, growing interest allows even more important players to participate.

Another positive factor is that DeFi protocols maintain a total locked value (TVL) of USD 13.5 billion, despite the fact that the sector suffered a substantial blow after the 17-hour network crash that occurred between September 14 and 15.

Total value locked in Solana (in USD). Source: DefiLlama

The Solana Foundation stated that bots spammed the network when Grape launched its IDO on Raydium, based on Solana. That activity overwhelmed throughput with a transaction load of 400,000 per second, necessitating a coordinated hard fork by validators to ignore spam requests.

A price of $ 250 seems closer than ever for SOL

VORTECS ™ data from Cointelegraph Markets Pro also began to spot a bullish outlook for SOL on October 20, nearly 24 hours before the 15% rally that took the price to $ 210.

The VORTECS ™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trade volume, recent price movements, and Twitter activity. .

VORTECS ™ Score (green) vs. SOL price (white). Source: Cointelegraph Markets Pro

Data shows that the current number of tweets from unique accounts talking about Solana is 32% higher than the 30-day average. Tweet volume is one of the components of the VORTECS ™ Score that identified bullish conditions for SOL on October 20.

As Solana’s ecosystem expands, the network remains a viable solution for DeFi and NFT applications looking for cheap and fast transactions. Both on-chain and derivative indicators indicate that a price of USD 250 per SOL by the end of the year is fully feasible.

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The views and opinions expressed here are solely those of the Author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves risks, you must do your own research when making a decision.

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