Key Points:
- 76% of retail traders are currently holding long positions on Solana, a historically bullish indication.
- Institutional investors are accumulating SOL as it trades below $200.
- Increased whale activity is observed ahead of the expected spot SOL ETF decision on October 16.
Price data indicates that Solana (SOL) under $200 might be undervalued, based on analytics reflecting a significant bullish tilt among retail traders. The on-chain analytics platform Hyblock noted that SOL is among the leading crypto assets with a high percentage of retail long positions (TRA). In an X post, it stated:
“Approximately 76% of retail accounts hold net long positions on Solana, a level that typically forecasts positive future returns.”
Hyblock’s analysis demonstrates a historical pattern wherein SOL’s seven-day mean and median returns enhance significantly when the TRA exceeds 75%, indicating a more favorable risk-reward dynamic.
Solana retail long position analysis. Source: Hyblock Capital/X
Crypto analyst Darkfost has a favorable outlook, connecting broader altcoin capitulation to potential accumulation phases. He observed that only 10% of altcoins on Binance are above their 200-day moving average, suggesting prevalent market fear. He remarked:
“The ideal time to invest in altcoins tends to be when they are least favored by the market.”
Percentage of altcoins above the 200D-SMA on Binance. Source: X
Currently, corporate treasuries seem poised to buy SOL priced under $200. The company Solmate (Nasdaq: SLMT) purchased SOL worth $50 million from the Solana Foundation at a substantial discount, while ARK Invest declared an ownership stake of 11.5%. Solmate previously amassed $300 million to develop its digital asset treasury.
In a similar vein, SOL Strategies (Nasdaq: STKE) acquired an additional 88,433 SOL at an average price of $193.93 each, solidifying its total holding to 523,433 SOL.
Will SOL Sustain Above $200?
The long-term prospects for SOL remain optimistic; however, its downturn below $190 indicates the first bearish signal since February, hinting at potential momentum shifts at higher time scales. Despite a temporary recovery over the 200-day exponential moving average (EMA), SOL’s trading range is now compressed between the 50 and 100-day EMAs, signifying indecisiveness.
Bidding might persist below $200, but the chances of a rapid recovery appear limited. SOL has recently retested areas from $190 to $170, likely fulfilling prior buying orders from the Oct. 10 market crash. A consolidation phase might bring the price down to $160 if bullish momentum doesn’t regain strength in the following days.
SOL one-day chart. Source: Cointelegraph/TradingView
Even with current bearish sentiments, analyst Pelin Ay reported that whale activity on SOL has started to surge, a precursor to past rallies of 40% to 70%. This trend suggests whales are positioning ahead of the anticipated spot SOL ETF decision, which could invigorate demand. If winner outcomes occur, supply tightness may reinstate SOL’s upward trajectory beyond the $200 mark.
SOL spot average order size. Source: CryptoQuant
This article serves informational purposes and should not be taken as investment advice. Investing carries risks, and independent research is recommended.
