Bullish bets on Solana futures raise record $1 billion | CoinDesk JAPAN

• Solana (SOL) has gained 15% over the past two weeks, making it the best performer among the major tokens.
• Data shows that most of SOL's futures open interest is due to leveraged bullish bets, but a long squeeze could occur.

Bets on futures tracking Solana (SOL), led by bulls, reached a record high of $1.7 billion (approximately 255 billion yen, at an exchange rate of 150 yen to $1) over the past week.

Notional open interest, or the dollar value tied to open futures contracts, rose by more than $700 million to $1.7 billion since early February. Especially since February 8th, an additional $400 million (approximately $60 billion) has been added. This is higher than the $1.4 billion figure recorded in late December, when the ecosystem saw a meme-coin-driven frenzy.

According to data from Coinalyze, more than 63% of positions are long, or bets on the upside, amounting to more than $1 billion.

An increase in open interest means new or additional money is flowing into the market as prices rise.

However, leverage is a double-edged sword. Both profits and losses can be large, and they are known to cause volatility in the market. When using high leverage, price increases or decreases can often trigger liquidation events, leading to sharp movements in tokens.

The current bias towards long positions means that a long squeeze is possible. In the event of a down market, investors with long positions will be forced to sell to cut their losses, creating a chain of liquidations. A similar increase in late December peaked at $1.37 billion (about 205.5 billion yen), but has since fallen about 30%, from $120 to $83.

However, since the open interest of $1.7 billion is less than 5% of SOL's market capitalization of $50.55 billion (approximately 7,582.5 billion yen), futures fluctuations are unlikely to have a long-term impact on spot prices. Probably not.

According to the data, SOL’s price has increased by 15% in the past two weeks, making it one of the fastest growing tokens among other major tokens.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Danny Nelson
｜Original text: Solana's SOL Futures Rack Up $1B in Record Bullish Bets