Solana Bullish Signals: Retail, Whales Eye ETFs

Key Takeaways

• Approximately 76% of retail traders are net long on Solana, a metric historically associated with positive future returns.
• Institutional investors and treasury firms are actively accumulating Solana (SOL) tokens at prices below $200.
• Increased whale activity on Solana has been observed as the market anticipates a decision on a spot SOL ETF.

Current Solana (SOL) prices below $200 may represent an undervalued opportunity, according to recent data indicating a rare bullish sentiment among retail traders. Onchain analytics platform Hyblock recently highlighted that SOL is the only major cryptocurrency exhibiting the highest percentile for its true retail long percentage (TRA).

💡 While retail sentiment can sometimes be a contrarian indicator, a prolonged high percentage of long positions could signal strong conviction.

Hyblock’s analysis, shared via X, stated, Around 76% of retail accounts currently hold net long positions on Solana, a threshold that historically aligns with positive forward returns. A backtest of this signal by Hyblock revealed that when TRA exceeds 75%, Solana’s seven-day average and median forward returns have historically increased from approximately +2.25% to over +5%, accompanied by reduced average drawdowns. The risk-reward ratio (RR) nearly doubles during these periods, suggesting enhanced upward momentum and decreased downside volatility.

✅ It’s worth noting that a high retail long percentage coupled with reduced drawdowns points to a potentially robust, less volatile upward trend.

In a similar vein, crypto analyst Darkfost shared an optimistic view, suggesting that the current widespread altcoin capitulation could be a precursor to an accumulation phase. He noted that fewer than 10% of altcoins listed on Binance are currently trading above their 200-day moving average, indicating significant fear and reduced interest in the market. Historically, such conditions have often preceded notable market recoveries.

📊 Understanding broader altcoin market conditions can provide context for individual asset performance, especially Solana.

Darkfost commented, The best time to gain exposure to altcoins is often when no one wants them anymore, adding that previous market cycles have shown similar setups leading to strong short-term rebounds.

Meanwhile, corporate digital asset treasuries appear to be capitalizing on Solana’s price point below $200. Solana treasury company Solmate (Nasdaq: SLMT) reportedly purchased $50 million worth of SOL from the Solana Foundation at a 15% discount, with ARK Invest disclosing a new 11.5% ownership stake. Solmate had previously raised $300 million to establish its digital asset treasury.

📈 Institutional accumulation, especially at discounted rates, can often signal a strong belief in the asset’s future value.

Additionally, treasury firm SOL Strategies (Nasdaq: STKE) acquired an additional 88,433 SOL, including 79,000 locked SOL from the foundation, at an average price of $193.93 per coin. This acquisition increased their total holdings to 523,433 SOL, underscoring a coordinated effort by institutional players to accumulate at current price levels.

📍 These strategic purchases by treasury firms suggest confidence in SOL’s valuation and future prospects.

Can SOL Maintain a Position Above $200?

While Solana’s long-term outlook remains positive, its recent price action saw a dip, with a daily close below $190 marking the first bearish break of structure since February, hinting at a potential shift in momentum on higher time frames.

⚡ A break below key support levels needs careful monitoring, as it can precede further price adjustments.

Although SOL briefly regained its 200-day exponential moving average (EMA), it is currently trading between the 50-day and 100-day EMAs. This price compression often signifies market indecision, with weakening short-term momentum while medium-term support levels are being tested, frequently preceding a significant directional move.

📊 Price compression between moving averages can indicate a period of consolidation before a major breakout or breakdown.

Traders may continue to place buy orders below the $200 mark, but a rapid recovery could face limitations. However, SOL has recently retested long-term demand zones ranging from $190 to $170, likely absorbing earlier buy orders during the Oct. 10 flash crash. A continued consolidation phase could see SOL move between $160 and $200 if bullish momentum falters in the coming days.

📌 A focus on demand zones is crucial for identifying potential support levels where buying interest may emerge.

Despite the short-term bearish technical setup, market analyst Pelin Ay observed that whale order activity on SOL has begun to increase again. This trend has historically preceded rallies ranging from 40% to 70%. The analyst suggests that whales are positioning themselves ahead of the upcoming Thursday decision on the spot SOL ETF, which could act as a catalyst for stronger spot demand.

⚡ Increased whale activity can be a significant indicator of upcoming price movements, especially when timed with major catalysts like ETF decisions.

Combined with SOL’s high staking ratio and the potential for inclusion in various publicly listed indexes, a favorable ETF outcome could lead to a tighter supply and re-establish SOL’s bullish trajectory above the $200 level.

This article does not offer investment advice. All investment and trading decisions carry risk, and individuals should conduct their own thorough research.