According to market data, large Solana (SOL) holders are actively trading bearish options on Deribit. The heightened activity follows a sharp decline in SOL’s price, which has fallen 46% in five weeks. The marketplace becomes more stressed by upcoming token release events valued at multiple billions of dollars.
Big financial entities, alongside whales, have continuously boosted their Deribit-based put option spending. These trades account for nearly 80% of the block-trade volume in SOL options. Traders demonstrated substantial bearish attitudes by buying hedging options to protect themselves from SOL price decreases.
Technical indicators confirm the ongoing downward trend in SOL’s price. The token currently rests beneath its essential support areas and multiple average indicators. The sustained bearish pressure forces investors to monitor various important price levels in anticipation of additional price devaluation.
SOL Options Activity Surges on Deribit
Whale traders are aggressively engaging in put option trades for SOL. Deribit data shows that block trades in SOL options totaled $32.39 million in notional value last week, representing nearly 25% of the platform’s total options activity of $130.74 million.
Institutional investors execute substantial private option trades through block trades. Risk management through these trades enables big operators to conduct their activities without leading to significant market price implications. The high proportion of SOL block trades to total options activity is the second-largest on record.
Market participants prefer buying put options as an indication they expect SOL prices to decrease in the future. Unlike Bitcoin and Ethereum, which had lower put activity, SOL traders displayed a much stronger bearish bias. This trend aligns with ongoing concerns about SOL’s future price movement.
Solana Faces Increased Selling Pressure
SOL has experienced a consistent price decline, losing over 46% in value in five weeks. The market value of SOL stands at $158.79 as it faces a 5.45% decrease during one day. Broader market weakness has compounded the downward pressure on SOL.
The technical analysis shows weak performance because SOL trades beneath all key moving averages at present. The Relative Strength Index (RSI) is at 30.29, indicating near-oversold conditions. The MACD indicator is showing ongoing negative trends that indicate price downturns should continue.
The $150-$155 support zone remains crucial for SOL. If it does not manage to stay within this price level, SOL faces increased bearish prospects. A price rebound may become possible when buying activity enhances its strength exactly at the key resistance levels of $180 and $200.
SOL Token Unlock and Market Implications
A major token unlock event is set to release 11.2 million SOL tokens on March 1. The released SOL tokens have a fundamental value of $2.07 billion, which is 2.29% of the entire SOL token supply. The FTX estate, together with foundation sales, makes up the majority of these tokens.
This upcoming unlock will have major effects on future market fluctuations. The release accounts for nearly 59% of SOL’s daily spot trading volume, increasing selling pressure. Market participants expect price fluctuations, so they decide to implement more hedging strategies to protect themselves.
Lin Chen from Deribit’s Asia Business Development division predicted that volatility would surge. According to his observations, the substantial unlock created expectations for an expansion of price drops. Traders have selected options to reduce the impact of potential financial losses.
Conclusion
Solana’s options market on Deribit has seen increased activity from whales betting on further price declines. The surge in put options highlights growing concerns about SOL’s near-term outlook. The upcoming token release increases market unpredictability because it presents additional uncertainty to the market.
Traders remain cautious as SOL trades below key technical levels. The future path for the token depends on successful protection around the $150-$155 support region. Market observants will carefully track both technical signals and options market behavior to predict whether SOL stands in reverse direction or continues its downward trajectory.
Glossary
Block Trade: A large, privately negotiated options transaction executed outside the regular order book.
Put Option: A financial contract that grants the right to sell an asset at a predetermined price.
EMA: A type of moving average that gives more weight to recent prices.
RSI: A technical indicator used to measure the strength of price movements.
MACD: A trend-following momentum indicator showing the relationship between two moving averages.
FAQs
What is causing the increase in SOL put options activity?
Large investors are hedging against further price declines due to bearish market conditions and the upcoming token unlock.
Why is the SOL price declining?
The price is falling due to weak technical indicators, declining blockchain activity, and selling pressure from upcoming token unlocks.
How does a token unlock affect SOL’s price?
A token unlock increases the circulating supply, which can lead to additional selling pressure and increased market volatility.
What are the key support and resistance levels for SOL?
Support levels are at $150-$155, while resistance levels to watch are at $180 and $200.
What technical indicators suggest SOL’s bearish trend?
SOL trades below major moving averages, while the RSI and MACD confirm ongoing downward momentum.
Reference
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