During the current week, the solana to usdt rate exhibited the “first down and then up” pattern. The price opened on Monday at 153.2 USDT. On Wednesday, influenced by the lawsuit against Kraken from the SEC, it went as low as 142.5 USDT in the course of the week (losing 7%). Then, after the successful recovery of Firedancer testnet upgrade of Solana network, it reached a high of 158.8 USDT on Friday with an amplitude of 11.3% and a total accumulation of 3.2% over the last seven days. On-chain data shows that the volume of USDT transfers on the SOL chain increased from Monday’s 1.2 billion to Friday’s 1.9 billion, a growth of 58%. Jump Trading transferred 470 million USDT to CEX through the Solana cross-chain bridge, leading to a herd buying effect in the market.
The technical indicators indicate that the RSI of the SOL/USDT increased from 42 (oversold range) at the beginning of the week to 56 (level of neutrality), the MACD histogram formed a golden cross symbol on Thursday, the Bollinger Bands squeezed from 9.3 USDT to 6.8 USDT, and volatility fell by 26.9%. The struggle of the bulls vs. bears on the derivatives market has increased: Binance perpetual open position broke over 680 million US dollars (rose 34% weekly) and also reversed funding rates back from -0.03% to +0.06%. Meanwhile, Deribit’s options contract call position in a strike value of 160 USDT symbolizes 41%, and chances for it growing over the weekend stand at a high of 63%.
Ecological mishaps have now become principal inducers. Solana-based DeFi protocol Kamino has added a “zero-slippage USDT staking pool.” Locked value jumped by 210 million US dollars in one week (47% increase). Those who deposit USDT can gain a 12% yearly rate and convert automatically to SOL in order to insulate themselves against devaluation hazard. It pushed the quantity of solana exchanged for usdt over 730 million US dollars during a day on Thursday (82% more than its weekly average). Additionally, NFT platform Tensor said it was adding support for USDT to purchase Solana ecosystem NFTS, which pushed its platform’s USDT amount settled week-on-week by 220% to $140 million, indirectly sustaining SOL demand.
Macro and regulation go hand in hand. The US CPI rose by 3.3% year-on-year in July (estimated to be 3.1%), supporting the Federal Reserve’s interest rate hike. The US dollar index (DXY) bounced back by 1.2%, causing the over-the-counter premium of USDT to fall from +0.15% to -0.07%. USDT was exchanged for SOL for hedging the possible volatility of the US dollar by some investors. But Tether’s audit report of its $83 billion Treasury bond reserves (83% of circulating volume) helped revive market confidence, and USDT was able to maintain its top position of 62% in on-chain stablecoin trading volume during the time of unprecedented volatility in SOL.
On-chain activity assures the trend’s endurance. The Solana daily active address average reached 1.41 million this week (370,000 for Ethereum), among which 38% of addresses participated in the solana to usdt transaction. The average Gas fee was also 0.0002 USDT (1.5 USDT for Ethereum). Wintermute market maker was identified as having purchased a total amount of 720,000 SOL (approximately 102 million US dollars) within 142-146 USDT with an average of 144.3 USDT. If maintained at the current price level (157.5 USDT), it has a potential floating profit of 9.1%. Short-term forecast models show that the correlation coefficient between SOL/USDT price and network activity is 0.78. If Firedancer upgrade reduces the block failure rate below 0.1% as scheduled, this is expected to probe the high resistance level before reaching 163 USDT for the rest of this week.