The Solana (SOL) market faces increased bearish pressure as large traders, known as whales, have significantly ramped up their put options positions on Deribit. This surge in bearish bets comes amid SOL’s dramatic 46% price decline and an upcoming token unlock event.
Whale Activity Signals Market Caution
Last week saw remarkable options activity on Deribit, with SOL block trades reaching $32.39 million. These trades made up 25% of total options activity. The most striking detail? Nearly 80% of these block trades focused on put options.
This heavy emphasis on puts stands in sharp contrast to other major cryptocurrencies. Bitcoin saw only 40% put activity, while Ethereum registered 37.5% during the same period. This disparity suggests heightened concern about SOL’s near-term prospects.
Market Fundamentals Under Pressure
Several factors drive this bearish sentiment. SOL’s price has dropped to $160, marking a 46% decline in just over five weeks. The Solana network’s activity has also decreased significantly since its peak during the TRUMP token launch.
The most pressing concern comes from an imminent token unlock scheduled for March 1. This event will release 11.2 million SOL tokens, valued at approximately $2.07 billion. The unlock represents 2.29% of the total supply, with a significant portion coming from the FTX estate.
Trading Implications
The large token unlock could trigger increased market volatility. It represents nearly 59% of SOL’s daily trading volume, explaining why traders seek protection through put options. Market participants also view this as an opportunity to capitalize on volatility trading.
For traders considering position adjustments, the high put option volume suggests strong downside protection buying. This often indicates a potential continuation of bearish momentum in the short term.
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The current market structure suggests traders should monitor the March 1 unlock event closely. The high concentration of put options could act as a self-fulfilling prophecy, potentially driving prices lower as the unlock date approaches.
Tags: Solana, Options Trading, Cryptocurrency Markets, Token Unlock, DeFi
Source: CoinDesk