Key takeaways:
SOL aggregate volumes show retail traders piling into spot positions as the altcoin rebounded from $190.
Traders could be positioning ahead of an anticipated favorable SEC Solana ETF decision on Oct. 10.
SOL price rallied to $213 on Monday, gaining nearly 12% over the past 3 days and suggesting that the recent sell-off to $190.85 was viewed as a discounted buying opportunity by traders. With the SEC’s final Solana ETF decision expected by Oct. 10, SOL charts suggest that traders intend to frontrun the decision and possibly send the altcoin’s price to new highs over the next 2 weeks.
Let’s take a brief peek behind the curtain to see what’s happening with SOL.
Retail longs bought entire dip
As Bitcoin price and the broader crypto market sold-off last Monday, the cumulative volume delta for Binance spot and futures traders shows retail-size (100 to 1,000) traders at Binance buying the decline. A similar trend is seen in the institutional investor-size spot CVD (10,000 to 10 million) at Coinbase.
Further proof of retail investors’ appetite for SOL can be seen in the chart below in Hyblock’s True Retail Longs and Shorts Accounts metric, an indicator that tracks the percentage of Binance retail accounts that are holding long versus short positions, rising to 78.2 (at the peak of the sell-off) from 54.3.
As these retail traders positioned long, Solana’s aggregate spot orderbook bid-ask ratio (set at 10% orderbook depth) pushed above 0, to 0.47, indicating an orderbook tilted toward buyers. Looking at the anchored 4-hour cumulative volume delta shows buyers in the retail cohort voraciously buying SOL, with $71.98 million in volume in the most recent 4-hour interval.
What else is needed for SOL to reach new highs?
Beyond the day-to-day price action of the recent rebound, ahead of the Oct. 10 Solana ETF decision, bullish traders betting on new SOL highs will want to keep an eye on the altcoin’s aggregate open interest at centralized exchanges, along with the CME open interest and CME futures volume.
Ideally, a return to the levels reached on Sept. 18, when SOL rallied to a yearly high of $253, will build up over the next two weeks. SOL’s CME future open interest stood at $2.12 billion, and its CME futures volume ticked to $1.57 billion on Sept. 18, and according to Sept. 26 data from Velo.xyz, each respective category is $1.72 billion and $400 million.
Similarly, SOL’s aggregate open interest currently sits below the pre-yearly price high run-up, which saw its OI top out at $3.65 billion.
Another metric to watch is SOL cumulative returns per session, particularly in the US, as this is where the spot ETFs are pending a final decision. As shown in the chart below, returns during the US session have turned positive since Friday.
Ideally, if SOL is becoming a sticky rotation trade that traders intend to frontrun ahead of the ETF decision, it would also be good to see cumulative returns in APAC and EU sessions rise to align trend-wise with the US trading session.
