Solana’s Price Breakout: A Comedy of Errors or a Bullish Bet? 🤷‍♀️

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Key Takeaways

  • Solana has finally broken out from its July compression, but the increased hedging suggests some players aren’t buying it. What’s next for SOL prices?

Solana [SOL] has finally broken out from its July compression, just in time for the Federal Market Open Committee (FOMC) minutes. 🎉 While this could signal a 5% surge to $160, the Options market is telling a different story. There’s a considerable amount of hedging (bearish bets) going on, which is a bit of a mood killer. 😕

SOL Traders Remain Cautious

The FOMC Minutes are like the weather forecast for traders—everyone’s watching to see if the Fed will bring the sunshine or the rain. Between 7-9 July, the sentiment across Options Volume jumped from a bullish Put/Call (P/C) ratio of 0.35 to a bearish rating of 1.19. 📈 This means more people are betting on a potential pullback if the FOMC Minutes turn hawkish. 🦅

Could this spike in bearish bets stall the mid-week and July breakout? At the moment, the derivative market is as flat as a pancake, with Open Interest (OI) stuck around $7.1 billion. 🥞 This suggests that speculative interest hasn’t really picked up in July, unlike the recovery from $4 billion to over $7 billion in Q2. Unless the OI expands, SOL’s breakout might be a bit of a dud. 🎈

Meanwhile, there’s no strong bidding from the spot market. According to Coinalyze data, the spot CVD (Cumulative Volume Delta), which tracks overall demand and selling, has declined in early July. 📉

Still, the OI jumped 11% over the same period, suggesting that the July price action and recent breakout were driven by speculation and leverage. Without any real spot demand, the rally could be short-lived or retraced. 🏃‍♂️

In the mid-term, SOL ETF speculation could set the direction for Q3. However, for this week, SOL could be driven by liquidation hunts. 🕵️‍♀️ If that’s the case, SOL could hit $154.6 or stretch to $158 before the leveraged longs at $145 start feeling the heat. 🌞

There’s nearly $600 million in cumulative longs at $145, making it a potential price magnet. 🧲

That said, the Q2 rebound showed a bullish structure after defending the realized price (average cost basis of most SOL holders). Any sustained drop below the realized price (currently at $131) would invalidate the bullish market structure. 🚨

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2025-07-10 07:05