Key takeaways:
SOL aggregate volumes indicate that retail traders are increasingly taking spot positions as the altcoin recovers from $190.
Traders may be preparing for a favorable SEC Solana ETF decision expected on Oct. 10.
SOL (SOL) price surged to $213 on Monday, marking nearly a 12% increase over the last 3 days. This suggests the recent drop to $190.85 was perceived as an opportunity for discounted buying. As the SEC’s final decision on the Solana ETF approaches on Oct. 10, SOL charts indicate that traders aim to front-run the announcement, potentially driving the altcoin’s price to new highs in the next two weeks.
Let’s take a closer look at the situation with SOL.
Retail longs purchased the entire dip
As Bitcoin (BTC) and the wider crypto market dropped last Monday, the cumulative volume delta for Binance spot and futures traders reveals retail-sized (100 to 1,000) traders actively bought the dip. A parallel trend is observed in the institutional investor-sized spot CVD (10,000 to 10 million) at Coinbase.
Additional evidence of retail interest in SOL can be found in Hyblock’s True Retail Longs and Shorts Accounts metric, which tracks the proportion of Binance retail accounts holding long versus short positions, rising from 54.3 to 78.2 during the peak price sell-off.
As these retail traders entered long positions, Solana’s aggregate spot orderbook bid-ask ratio (set at 10% orderbook depth) climbed to 0.47, indicating a buyer-favored orderbook. The anchored 4-hour cumulative volume delta reflects active buying from the retail group, with $71.98 million in volume over the latest 4-hour period.
Related: Price predictions 9/29: SPX, DXY, BTC, ETH, XRP, BNB, SOL, DOGE, ADA, HYPE
What else is required for SOL to achieve new highs?
Apart from the daily price movements of the recent rebound, ahead of the Oct. 10 Solana ETF decision, bullish traders anticipating new SOL highs should monitor the altcoin’s aggregate open interest at centralized exchanges, along with the CME open interest and CME futures volume.
Preferably, a return to the levels seen on Sept. 18, when SOL reached a yearly high of $253, should materialize over the next two weeks. On Sept. 18, SOL’s CME future open interest was recorded at $2.12 billion, with CME futures volume at $1.57 billion, and according to Sept. 26 data from Velo.xyz, these respective figures are currently $1.72 billion and $400 million.
Furthermore, SOL’s aggregate open interest is currently below the peak reached before the yearly high rally, which had its OI peak at $3.65 billion.
Another important metric to observe is SOL’s cumulative returns per session, particularly in the US, where spot ETFs await a final decision. The chart below demonstrates that returns during the US session have turned positive since Friday.
If SOL is becoming a robust rotation trade that traders wish to front-run ahead of the ETF decision, it would be beneficial to see cumulative returns in APAC and EU sessions also increase in alignment with the US trading session.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
