Key takeaways:
SOL aggregate volumes indicate retail traders are entering spot positions as the altcoin recovered from $190.
Traders may be positioning themselves ahead of a potentially favorable SEC decision regarding the Solana ETF on Oct. 10.
The SOL (SOL) price surged to $213 on Monday, marking a nearly 12% increase over the last three days, suggesting that the recent decline to $190.85 was seen as a buying opportunity by traders. With the SEC’s final Solana ETF decision expected by Oct. 10, SOL charts indicate traders are looking to front-run the decision, potentially pushing the altcoin’s price to new highs in the coming weeks.
Let’s take a moment to explore what’s transpiring with SOL.
Retail longs bought the entire dip
As the price of Bitcoin (BTC) and the wider crypto market dropped last Monday, the cumulative volume delta for Binance spot and futures traders shows that retail-sized (100 to 1,000) traders were buying the dip at Binance. A similar trend is observed in the institutional investor-sized spot CVD (10,000 to 10 million) at Coinbase.
Further evidence of retail investors’ demand for SOL is reflected in Hyblock’s True Retail Longs and Shorts Accounts metric, which tracks the percentage of Binance retail accounts holding long versus short positions, rising to 78.2 (at the sell-off peak) from 54.3.
As these retail traders positioned long, Solana’s aggregate spot orderbook bid-ask ratio (set at 10% orderbook depth) rose above 0, reaching 0.47, indicating an orderbook skewed towards buyers. The anchored 4-hour cumulative volume delta reveals that retail buyers were actively purchasing SOL, with $71.98 million in volume during the most recent 4-hour interval.
Related: Price predictions 9/29: SPX, DXY, BTC, ETH, XRP, BNB, SOL, DOGE, ADA, HYPE
What else is needed for SOL to reach new highs?
In addition to the daily price movements of the recent rebound leading up to the Oct. 10 Solana ETF decision, bullish traders hoping for new SOL highs should monitor the altcoin’s aggregate open interest across centralized exchanges, along with CME open interest and futures volume.
A return to the levels reached on Sept. 18, when SOL hit a yearly high of $253, will be crucial over the next two weeks. SOL’s CME futures open interest was at $2.12 billion, with CME futures volume reaching $1.57 billion on Sept. 18; as of Sept. 26, these figures are $1.72 billion and $400 million, respectively, according to data from Velo.xyz.
Moreover, SOL’s aggregate open interest currently rests below the peak seen during the yearly price high run-up, which had an OI topping out at $3.65 billion.
Another important metric to track is SOL cumulative returns per session, especially in the US, where spot ETFs are awaiting a final decision. The chart below shows that returns during the US session have turned positive since Friday.
Ideally, for SOL to emerge as a favored 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 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.
