Solana ETP Inflows Exceed $500M While CME Futures Interest Peaks: Is SOL Ready for a Surge?

Key Takeaways:

CME open interest for SOL reached a record high of $2.16 billion, indicating significant institutional participation.
Retail traders remain cautious following $307 million in liquidations, leading to subdued leverage levels.
Solana ETPs have surpassed $500 million in assets under management, highlighting trends in institutional accumulation.

Solana’s futures have entered a crucial moment as the CME open interest surged to an all-time high of $2.16 billion, with SOL’s price climbing by 23% to $235 from a low of $195 last Friday. This occurred alongside rising institutional trading volumes after SOL’s price bottomed out, suggesting market players are positioning themselves prior to the SEC’s decision regarding the SOL ETF on October 10.

SOL CME futures data. Source: Velo.data

The CME’s annualized basis was recorded at 16.37%, notably lower than the 35% peak in July, signaling optimism without excessive fervor. In contrast, the open interest among retail investors on centralized exchanges has remained nearly unchanged during this rally.

SOL price, aggregated open interest, and funding rate. Source: Velo.data

This divergence suggests that while institutions are actively accumulating, retail investors are hesitant, possibly due to the $307 million in liquidations that occurred on September 22, where $250 million in long positions were lost. Traders seem reluctant to pursue momentum, reducing the risk of extreme volatility.

Solana total liquidation chart. Source: CoinGlass

From a structural viewpoint, the market appears balanced yet bullish. Institutions are steadily building their positions, while the caution of retail traders helps to prevent excess froth. The increase in CME trading volumes at SOL’s bottom implies that purchases are being made by stronger investors, rather than speculative trades.

Additionally, inflows into Solana ETPs have confirmed institutional interest. This week, total net inflows for Solana ETPs surpassed $500 million, led by the Solana Staking ETF (SSK) from REXShares, which crossed $400 million, while the Bitwise Solana Staking ETP (BSOL) climbed past $100 million AUM. This reflects the rapid rise of these funds since their inception and the growing acceptance of regulated options for gaining exposure to Solana.

Total SOL ETP net flows. Source: Hunter Horseley/X

Short-term SOL Price Scenarios: Rally or Dip?

The immediate future of SOL depends on the return of retail investor confidence. A pullback toward $218 to $210 would not jeopardize the overall bullish nature, as it would test a fair value gap on the four-hour chart and the 200-period exponential moving average (EMA).

SOL four-hour chart. Source: Cointelegraph/TradingView

The liquidation heatmap reveals a significant liquidity cluster exceeding $200 million between $220 and $200, which could attract prices. A correction into this range could create a solid higher low, maintaining the bullish market structure while eliminating tardy participants.

Solana liquidation heat map. Source: CoinGlass

Alternatively, a strong movement above $245 to $250 could indicate strength, potentially driving SOL towards its historical highs near $290. Given the institutional trends, this scenario grows more likely if ETF speculation continues to dominate discussions.

In all circumstances, the absence of aggressive retail leverage plays in SOL’s favor, decreasing the risk of significant sell-offs from liquidation cascades. The more institutions build upon the growth of CME open interest, the more plausible it is that any corrections remain minor rather than trend-altering.

Moving forward, SOL futures illustrate a market evolving from fear into cautious investment, with institutions taking the lead.