Key takeaways:
CME open interest for SOL reached an unprecedented $2.16 billion, indicating significant institutional involvement.
Retail traders are remaining cautious after $307 million in liquidations, resulting in muted leverage.
Solana ETPs have surpassed $500 million AUM, emphasizing trends in institutional accumulation.
Solana (SOL) futures are at a critical juncture, with the Chicago Mercantile Exchange (CME) open interest (OI) reaching a record high of $2.16 billion as SOL’s price climbed 23% to $235, rebounding from a local bottom of $195 on Friday. This timing is significant, as institutional volumes on CME increased following SOL’s bottom, showcasing how market participants are positioning themselves ahead of the SEC’s October 10 decision regarding the SOL ETF.
The CME annualized basis stood at 16.37%, significantly below its 35% peak in July, indicating optimism without overheating sentiment. In contrast, retail-driven OI on centralized exchanges remains relatively stable during the rally, with funding rates staying close to neutral.
This divergence suggests that while institutional players are aggressively positioning themselves, retail participants are more cautious, likely influenced by the $307 million in liquidations on September 22, where $250 million in longs were eliminated. Traders seem hesitant to chase momentum, making the market less susceptible to over-leveraged volatility.
This creates a balanced but optimistic outlook from a structural perspective. Institutions are building positions steadfastly, while retail caution helps avert excessive froth. With CME volumes rising at SOL’s local bottom, the data implies that stronger hands are accumulating rather than merely speculating.
Moreover, inflows into Solana exchange-traded products (ETPs) have solidified institutional interest. Total net flows for Solana ETPs exceeded $500 million in assets under management this week, led by the Solana Staking ETF (SSK) from REXShares, surpassing $400 million, while the Bitwise Solana Staking ETP (BSOL) exceeded $100 million AUM. This milestone highlights the rapid growth of BSOL and SSK since their launch and the accelerated adoption of regulated means for Solana exposure.
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Short-term SOL price scenarios: Rally or dip?
The short-term direction for SOL depends on the return of retail confidence. On the downside, a pullback toward $218 to $210 would not jeopardize the broader bullish structure, 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 indicates a dense liquidity cluster of over $200 million lying between $220-$200, potentially acting as a price magnet. A correction into this area could establish a healthy higher low, maintaining bullish market structure while flushing out late entrants.
On the upside, a decisive break above $245 to $250 would indicate strength, possibly driving SOL towards its previous highs near $290. Given the institutional flows, this scenario becomes more probable if ETF speculation remains a prominent narrative.
In both scenarios, the absence of aggressive retail leverage benefits SOL by reducing downside risks from sudden liquidations. The more institutions continue to support CME OI growth, the more shallow any correction is likely to be, rather than trend-breaking.
Currently, SOL futures depict a market transitioning from fear to measured accumulation, led by institutional players.
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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.
