Chicago Mercantile Exchange (CME) Group, a globally recognized derivatives exchange, announced on March 17 that it launched Solana (SoL) futures contracts, awaiting review by US financial regulators.
According to a February 28 announcement, market participants will have access to standard contract size micro contracts of 25 SOL or 500 SOL, with all contracts set for cash.
CME Group already offers Bitcoin (BTC) and Ether (ETH) futures and options agreements for investors looking to hedge the highly unstable nature of these digital assets.
By adding Solana futures contracts, traditional financial investors will give the crypto market additional exposure and provide fresh capital injections to the crypto market to support prices.
The CME for Derivatives agreements will be signed quarterly every 2024. source: CME Group
Related: CME Group reports record cipher volume for Q4
Solana Prices Respond to CME Futures Announcement
Following the launch of futures products in March, Sol's prices skyrocketed from about $125 to about $146 on February 28th, up about 17%.
Nevertheless, Sol had a clear downward trend in February, falling by around 46% from the beginning of the month to the current level from around $233.
Sol is currently well below the 200-day Exponential Moving Average (EMA). This is a dynamic and important level of support.
The relative strength index (RSI) is 33, placing Sol on the edge of the territory that is oversold and sold.
Current Solana Price Action. sauce: TradingView
The crypto market needs fresh capital to resume gatherings
Liquidity is the financial market, what oxygen is for divers, and the lack of fresh capital injections has stagnated crypto rallies that kicked off following President Donald Trump's reelection in the US.
This liquidity usually drives the price of Bitcoin. Bitcoin flows into larger Altcoins and smaller cap Altcoins as investors spin capital into risk curves.
According to Kyle Chassé, founder of Master Ventures, hedge funds and institutional investors are trying to profit from differences in spot BTC prices and futures prices, which are robbed of their transactions as price differences narrower, resulting in Bitcoin prices collapse.
Bitcoin needs new organic buyers who believe in assets to help the uptrend resume, as opposed to buyers at yield-tracking institutions, Chase added.
Unfortunately, the recent research report discovered by Matrixport's recent research report suggests that this BTC amendment could extend into April due to macroeconomic factors.
magazine: Solana's critics get right…and they're wrong
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
