Main Points:
76% of retail traders hold net long positions on Solana, a traditionally optimistic indicator.
Treasury firms and institutions are acquiring SOL for under $200.
Whale activity is increasing ahead of the spot SOL ETF decision on October 16.
Current prices of Solana (SOL) below $200 may indicate an undervalued state, as new data reveals a notably bullish sentiment among retail traders.
Onchain analytics platform Hyblock reported that SOL is the sole major crypto asset displaying the highest percentile for true retail long percentage (TRA). The trading platform shared in an X post,
“Around 76% of retail accounts currently hold net long positions on Solana, a threshold that historically aligns with positive forward returns.”
Hyblock’s backtest indicates that when TRA surpasses 75%, SOL’s seven-day average and median forward returns can escalate from approximately +2.25% to over +5%, while average drawdowns lessen. The analysis also pointed out that the risk–reward ratio (RR) nearly doubles during such instances, pointing to enhanced upward movements and decreased downside volatility.
Additionally, crypto analyst Darkfost provided an optimistic perspective, highlighting a broader capitulation among altcoins as a potential buying opportunity. The trader noted that merely 10% of the altcoins listed on Binance are above their 200-day moving average, reflecting widespread fear and lack of interest. Such conditions have historically preceded significant market recoveries.
Darkfost emphasized, “The best time to invest in altcoins is often when no one desires them anymore,” noting that past cycles exhibited similar setups leading to quick rebounds.
Currently, corporate digital asset treasuries seem to be capitalizing on SOL’s sub-$200 pricing. Solana treasury firm Solmate (Nasdaq: SLMT) acquired $50 million worth of SOL from the Solana Foundation at a 15% discount, with ARK Invest revealing a new 11.5% ownership stake. Solmate had previously raised $300 million to enhance its digital asset treasury.
Simultaneously, treasury firm SOL Strategies (Nasdaq: STKE) secured an additional 88,433 SOL, which includes 79,000 locked SOL from the foundation, at an average price of $193.93 per coin, increasing its total holdings to 523,433 SOL. These transactions illustrate a coordinated accumulation by institutional players at the current price levels.
Related: Bitcoin buyers build bids at $105K as crypto market meltdown nears conclusion
Is SOL likely to stay above $200?
While SOL’s long-term outlook remains positive, its recent drop and daily close below $190 represent the first bearish break in structure since February, indicating a potential shift in momentum on higher time frames.
Though SOL briefly regained its 200-day exponential moving average (EMA), it is now fluctuating between the 50-day and 100-day EMAs. This consolidation often reflects uncertainty, where short-term momentum weakens while medium-term support remains, commonly preceding larger directional movements.
Traders might continue placing bids below $200, although a quick recovery could be constrained. Nonetheless, SOL has recently retested long-term demand zones from $190 to $170, likely absorbing previous buy orders initiated during the October 10 flash crash.
A continuation could see SOL settle around $160 from $200 if bullish momentum continues to be lackluster in the following days.
Despite the short-term bearish configuration, market analyst Pelin Ay noted that whale order activity on SOL has begun to rise again, a trend that historically anticipates rallies of 40%–70%. The analyst mentioned that whales are positioning themselves in advance of the Thursday spot SOL ETF decision, which could lead to increased spot demand.
Combined with SOL’s high staking ratio and its potential inclusion in various publicly listed indices, a favorable ETF outcome could tighten supply and help re-establish SOL’s bullish trend above $200.
Related: Ether drops 8%, but traders say ETH price breakout to $10K is ‘loading’
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.
