Solana Options Surge: Traders Expect Major Price Movements Ahead of Unlock

Solana Options Market Sees Bearish Bets Amid Token Unlock and Declining Activity

Solana Options Surge – The Deribit options market for Solana’s SOL token has recently seen increased activity, with whales betting on bearish movements ahead of an impending multi-billion dollar unlock. Last week, SOL block trades totaling $32.39 million in notional value crossed on Deribit, accounting for nearly 25% of the total options activity, which reached $130.74 million. This marks the second-highest proportion of block trades to total activity on record. Block trades are large privately negotiated transactions, typically carried out by whales, that have minimal impact on market prices.

Put Options Dominate Solana’s Bearish Bets

A notable aspect of the recent surge in block trades is the preference for put options, which allow traders to profit from or hedge against a potential price decline. Nearly 80% of the block-trade volume on Solana options consisted of put contracts. This is significantly higher than the put volumes for Bitcoin (40%) and Ethereum (37.5%) during the same period, highlighting the growing bearish sentiment surrounding SOL.

Imminent SOL Token Unlock Sparks Further Uncertainty

The bearish outlook for SOL is further compounded by the upcoming token unlock event on March 1, where 11.2 million SOL tokens, worth approximately $2.07 billion, will be released. This unlock represents 2.29% of the total supply and is expected to create market volatility, as it accounts for nearly 59% of SOL’s daily spot trading volume. The unlock, which includes a significant portion from the FTX estate and a foundation sale, is anticipated to exert additional downward pressure on SOL’s price.

Hedging and Volatility Trading Expected to Increase

In response to the market uncertainty surrounding the SOL unlock, traders are expected to engage in hedging strategies, particularly through put options. Additionally, many traders are anticipated to look for long volatility opportunities to capitalize on the expected price movements, adding further complexity to Solana’s market dynamics. As the unlock date approaches, the SOL token faces significant headwinds, with whales and other traders positioning themselves for potential price slides.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.