Solana open interest drops 30% as altcoin slump puts $68 in play

Solana futures open interest dropped 30% to $1.9 billion in May, pushing SOL toward the $80 support level with a retest of $68 in play.

"SOL has remained in a downtrend since October last year, and there is little meaningful support below current prices," Cold Blooded Shiller, a crypto trader, said on X.

Open interest on Solana futures declined to $1.9 billion from $2.75 billion on May 11, a 30% drop in roughly two weeks, Coinglass data shows. Funding rates held near negative 0.005, indicating no extreme concentration of short bets even as leveraged traders rapidly reduced their market exposure. Cumulative volume delta for stablecoin-margined futures fell to a year-to-date low of negative $13 billion, a sign that sell orders dominated futures trading.

A break below $80 would heighten the chance of a retest of the yearly low at $68, where about $800 million in leveraged long positions are clustered, on-chain liquidation data shows. Crypto analyst Zoe said buy orders were placed near $67, an area that overlaps with SOL's yearly low and a zone where large long-position liquidations are expected.

Spot flows have been comparatively stable. Spot CVD recovered to about $350 million since March, while spot SOL ETFs recorded $113 million of net inflows during May, suggesting spot investors have been buying on weakness even as leveraged traders cut positions. Market participants view the current move as a washout of speculative leverage rather than panic selling, according to Cointelegraph.

The broader altcoin market is under pressure as risk-off sentiment grips crypto. Bitcoin fell to near $73,400, while Ether slipped below $2,000 for the first time since March 29, according to CoinGecko data. Nearly $958 million of crypto positions were liquidated in 24 hours across all assets, with longs accounting for $897 million of the total, following US airstrikes in the Strait of Hormuz that stoked inflation concerns. Solana perpetual funding turned negative on Binance at -0.0161%, with shorts paying longs, a sign traders are leaning bearish on the token.

SOL has traded in an $80 to $95 range over the past three months, failing to break resistance near $95 on multiple attempts. The token's inability to hold above $90 accelerated the unwind of leveraged positions, with open interest contracting by more than $800 million since early May. On Deribit, about $8 billion in options expire on Friday, with bitcoin's max pain at $75,000, adding to the broader uncertainty across digital assets.

The concentration of leveraged longs near $68 creates a liquidation cascade risk. If SOL breaks below $80 and accelerates toward the yearly low, the forced closure of those positions could amplify the selloff, pushing prices below $68. The token's spot market has shown relative resilience, but the derivatives market tells a different story, with open interest contracting and funding turning negative across nearly every venue.

This article is for informational purposes only and does not constitute investment advice.