Silke Mayr Raydium has experienced a significant surge recently, leading it to enter the overbought territory. However, its funding rate suggests the potential for additional upward movement.
Over the past month, Raydium has surged by 83%, with a notable 33% increase in just the last week. The Solana-based automated market maker’s native token reached a 31-month peak of $3.59 earlier today, a level not seen since April 2022.
Despite a slight decline in recent hours, RAY is currently trading at $3.25, which is still down 81% from its all-time high of $16.93 recorded on September 13, 2021. With a market cap of $858 million, Raydium ranks as the 75th-largest digital asset in the market.
Can RAY Experience Another Rally?
Data from Santiment indicates that Raydium’s Relative Strength Index (RSI) is nearing the 80 mark, suggesting the asset is overbought, which could lead to potential profit-taking.
Nevertheless, Raydium’s total open interest has surged by 65% in the past day, climbing from $4.5 million to $7.4 million. Such an increase in open interest typically results in heightened price volatility due to potential liquidations.
The rise in open interest comes amid a wave of traders betting against the token’s price. Santiment data reveals that Raydium’s funding rate shifted from 0.06% on October 26 to -0.06% currently, indicating a growing dominance of short positions.
If liquidations of short positions begin to escalate, Raydium may experience renewed bullish momentum. However, the rising open interest and RSI also suggest the market is facing heightened volatility amid ongoing uncertainty.