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Solana derivatives volume surges by 110%; Here’s what it means

Solana derivatives volume surges by 110%; Here’s what it means

Solana (SOL) is the best-performing cryptocurrency of the week, with a price increase superior to 34% in the last seven days. However, the most relevant surge is within its spot exchange and derivatives volume in the day, both more than doubling up on November 2.

At the time of publication, data retrieved by Finbold from CoinMarketCap and CoinGlass show impressive surges in both volume indexes in the last 24 hours, with an increase of 106% on the spot exchange volume from the first source and over 110% in the derivatives operations volume for SOL.

Notably, Solana registered a 24-hour volume of $3.78 billion, which corresponds to 21% of its native token’s market capitalization of $17.75 billion, as SOL is trading at $42.9 by press time.

SOL stats: Market Cap, Volume (24h), and Volume/Market cap (24h).
SOL stats: Market Cap, Volume (24h), and Volume/Market cap (24h). Source: CoinMarketCap

Despite this high volume of SOL changing hands in the spot market, the cryptocurrency is now seeing a massive spike in demand for derivative contracts, which gets more meaningful as both Bitcoin’s (BTC) and Ethereum’s (ETH) derivatives volumes have increased in a slower pace in the same period.

Solana derivatives with increased trading demand

While Solana gets a 110% volume increase in its derivatives contracts, the two leading projects by market cap have also seen surges of 76% and 67%, respectively, in the crypto derivatives trend index by CoinGlass.

Crypto Derivatives Trend.
Crypto Derivatives Trend. Source: CoinGlass

Therefore, it means that crypto traders are mostly migrating their derivatives operations towards Solana’s native token instead of other competitors.

At the time of publication, SOL derivatives registered a total flow of $11.42 billion, which is three times as high as the already highlighted spot exchange volume. This amount also corresponds to half of the ETH’s 24-hour derivatives volume.

Interestingly, as the derivatives volume increases, Solana investors could possibly expect another price surge for the token, as both metrics seem fairly correlated according to a chart also retrieved from CoinGlass.

Solana Derivatives Volume.
Solana Derivatives Volume. Source: CoinGlass

Nevertheless, historical correlation does not necessarily mean that the price will continue to follow this metric. Derivatives data also suggests that there are more traders opening short positions than long positions right now.

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