Raydium has experienced a significant rally over the past month, entering the overbought zone. However, its funding rate suggests the possibility of further gains.

Raydium (RAY) is up 83% over the past month and has gained 33% in the last seven days alone. The native token of the Solana-based automated market maker reached a 31-month high of $3.59 earlier today—a level last seen in April 2022.

RAY saw a small drop over the past few hours and is trading at $3.25 at the time of writing. Currently, the token is down by 81% from its all-time high of $16.93 on September 13, 2021. With a market cap of $858 million, Raydium is currently the 75th-largest digital asset in the market.

Can RAY Rally Again?

According to data provided by Santiment, Raydium’s Relative Strength Index (RSI) is close to the 80 mark. This indicator shows that the asset is overbought, suggesting potential profit-taking could be on the horizon.

Raydium’s total open interest has increased by 65% over the past day—from $4.5 million to $7.4 million, according to Santiment. A sudden surge in open interest usually leads to higher price volatility due to increased liquidations.

RAY’s open interest grew as a wave of traders bet on the token’s price falling. Data shows that the total Raydium funding rate shifted from 0.06% on October 26 to -0.06% at the reporting time. The negative funding rate indicates a rise in short trades dominating RAY’s open interest.

If short RAY liquidations begin to rise, the asset could likely witness another bullish momentum. However, the increasing open interest and RSI hint at high price volatility as the market remains uncertain.

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