Key takeaways:
CME open interest for SOL reached a record high of $2.16 billion, indicating robust institutional activity.
Retail traders are exercising caution following $307 million in liquidations, keeping leverage low.
Solana ETPs have surpassed $500 million in assets under management, highlighting ongoing institutional accumulation.
Solana (SOL) futures are at a crucial juncture, as the Chicago Mercantile Exchange (CME) open interest (OI) hit a new peak of $2.16 billion, coinciding with a 23% price rebound to $235 from a local low of $195 on Friday. This rise in institutional activity on CME followed SOL’s bottoming out, indicating strategic positioning ahead of the SEC’s upcoming SOL ETF decision on October 10.
The CME annualized basis stood at 16.37%, significantly below July’s peak of 35%, reflecting a sense of optimism without being overly exuberant. In contrast, retail-driven OI on centralized exchanges has remained stable during the rally, with funding rates close to neutral.
This divergence suggests that while institutions are actively positioning, retail traders remain wary, likely influenced by the $307 million in liquidations on September 22, which saw $250 million in long positions wiped out. Traders are seemingly hesitant to chase the momentum, which may leave the market less vulnerable to over-leveraged volatility.
Structurally, this establishes a balanced but bullish scenario. Institutions are confidently building their positions, while retail caution helps avert excessive risk-taking. The significant increase in CME volumes at SOL’s local bottom indicates that accumulation by stronger hands is occurring rather than speculative trading.
Moreover, inflows into Solana exchange-traded products (ETPs) have underscored institutional demand. Total net flows for Solana ETPs exceeded $500 million in assets this week, prominently led by the Solana Staking ETF (SSK) from REXShares, which surpassed $400 million, while the Bitwise Solana Staking ETP (BSOL) exceeded $100 million AUM. This achievement highlights the swift growth of both BSOL and SSK since their launch and the increasing adoption of regulated products for Solana exposure.
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Short-term SOL price scenarios: Rally or dip?
The short-term trajectory for SOL depends on the return of retail confidence. On the downside, a pullback to the $218 to $210 range would not negate the overall bullish outlook, as it would retest a fair value gap (FVG) on the four-hour chart and the 200-period exponential moving average (EMA).
The liquidation heatmap also indicated that a substantial liquidity cluster over $200 million lies between $220 and $200, which could act as a price magnet. A correction into this range could create a healthy higher low, sustaining the bullish market structure while eliminating latecomers.
An upside movement beyond $245 to $250 would indicate strength, potentially propelling SOL toward its previous highs near $290. Given the institutional flows, this scenario gains credibility if ETF speculation remains prevalent.
In either case, the lack of aggressive retail leverage works to SOL’s advantage, minimizing downside risk from cascading liquidations. The more institutions continue to bolster CME OI growth, the more likely any corrections will be shallow rather than detrimental to the trend.
Currently, SOL futures illustrate a market transitioning from fear to careful accumulation, with institutions at the forefront.
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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.
