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Whale Positioning in SOL Put Options
Market Sentiment Bearish, 80% of Trades Concentrated in Put Options
SOL Price Plummets, Market Sentiment Turns Bearish
March 1st Unlock Event for SOL Could Intensify Selling Pressure
Whale Positioning in SOL Put Options
As the price of Solana (SOL) continues to decline, the trading volume of SOL options on the derivatives trading platform Deribit has surged, with large investors (whales) betting on further price drops.
According to CoinDesk, block trades of SOL options on Deribit reached a total of $32.39 million last week, accounting for nearly 25% of the platform’s total options trading volume of $130.74 million. According to data from Amberdata, this is the “second-highest” proportion of block trades in history, with the remaining trading volume coming from “screen trades” conducted through the exchange’s order book.
Block trades refer to large-scale options trades negotiated privately and registered on the exchange, usually executed by whale investors through over-the-counter (OTC) trading to minimize the impact on market prices.
Market Sentiment Bearish, 80% of Trades Concentrated in Put Options
Options are derivative financial instruments that allow holders to buy or sell assets at agreed prices before a specified date. Among them, call options allow the buyer to buy at a fixed price, while put options allow the holder to sell at an agreed price.
Greg Magadini, Derivatives Director at Amberdata, pointed out, “Approximately 80% of the block trades in SOL are concentrated in put options, far higher than the proportions of BTC (40%) and ETH (37.5%) during the same period.” This indicates that investors are actively hedging against the potential further decline in SOL.
SOL Price Plummets, Market Sentiment Turns Bearish
Over the past five weeks, the price of SOL has plummeted by 46% to $160, and market sentiment has turned pessimistic. The Solana blockchain attracted a large number of traders during the meme coin frenzy, especially after the launch of the TRUMP token on January 17, which reached its peak trading volume. However, subsequent daily trading volumes and DEX trading volumes on Solana significantly decreased, further weakening market confidence in SOL.
A report from blockchain data analysis company Artemis shows a significant decline in trading activity on the Solana network, which has formed a vicious cycle with the decline in SOL price.
March 1st Unlock Event for SOL Could Intensify Selling Pressure
Lin Chen, Head of Deribit’s Asia Pacific business, warned that a significant token unlock event on March 1st could further impact the price of SOL.
“Solana will unlock 11.2 million SOL tokens on March 1st, worth approximately $2.07 billion, accounting for 2.29% of the total supply. These tokens mainly come from the liquidation of FTX and sales by the Solana Foundation.”
Lin Chen pointed out that the scale of this unlock is close to 59% of SOL’s daily spot trading volume, which could lead to significant volatility in the market in the short term. Therefore, investors are buying put options in large numbers to hedge risks and profit from volatility trading (long volatility).
In summary, the recent price decline of SOL, weakened blockchain activity, and the upcoming large-scale unlock have led to a generally pessimistic outlook for its future performance in the market.