RAY Token Remains Overheated Despite Broader Crypto Market Cooldown
Bitcoin’s (BTC) recent consolidation has slowed the broader market’s momentum, flushing out over-leveraged positions and bringing funding rates closer to normal levels. Yet, one token remains red-hot: Solana-based decentralized exchange (DEX) Raydium’s native cryptocurrency, RAY.
According to VeloData, RAY’s annualized perpetual funding rates are still above 160%, making it the most overheated asset among small, mid, and large-cap tokens. This sky-high rate highlights a market crowded with long positions and a heavy bullish bias. Such conditions create vulnerability, as even minor price dips can trigger a domino effect of position liquidations, amplifying sell-offs and shaking out over-leveraged traders.
Tokens with market capitalizations under $5 billion, such as RAY, are particularly susceptible to these dynamics, with their derivatives markets often amplifying volatility.
Despite a 17% pullback to $5.39, RAY has still surged 67% this month, far outpacing Bitcoin’s 35% gain, according to CoinDesk data. Bulls have been drawn to its impressive performance, even as the token’s meteoric rise raises concerns about sustainability.
The rally coincides with record-breaking activity on Raydium’s platform. Artemis data shows $117.8 billion in trading volume this month, nearly double the $66.8 billion recorded on Ethereum-based DEXs. Raydium also generated $175 million in fees, narrowly surpassing Ethereum’s $168 million despite the latter being the largest smart contract blockchain.
This activity peaked earlier in the month, fueled by a memecoin trading frenzy that drove unprecedented interest in the RAY token. However, the momentum has since started to fade, leaving questions about the sustainability of RAY’s price strength as trading volumes normalize.
With its overheated funding rates and waning underlying support, RAY’s position remains precarious. For now, it continues to defy broader market cooling, but the risks of a sharp correction loom large.
