$14.5B Open Interest Raises Questions For Solana Bulls

Solana records a historic high : 71.8 million SOL are engaged in futures contracts. This peak in open interest could suggest a rise in strength. However, the crypto drops 18 % in one week, marking one of the worst market performances. This discrepancy between bullish speculation and price collapse raises questions: is the market fueled by excessive leverage?

A Record Open Interest and a Risk of Long Squeeze

Solana has crossed an unprecedented threshold on its futures contracts, with open interest reaching 71.8 million SOL, approximately 14.5 billion dollars, while the crypto undergoes a sharp correction.

This peak in open positions occurs while the asset price has fallen 18 % over the week, one of the poor performances among the top 20 crypto this year. Such a configuration reveals a growing imbalance. Perpetual funding rates are again positive at 0.0043 %, compared to -0.0065 % before, reflecting a dominance of leveraged long positions in a market nevertheless downward oriented.

The classic scenario of a “long squeeze” appears likely, as prices continue to fall despite increasing interest in derivatives.

The market data point to an overall unfavorable dynamic for bulls, with several negative technical signals :

• The net taker volume is mostly selling, indicating a decrease in the most aggressive orders ;

• The spot CVD (Cumulative Volume Delta) trends downward, revealing that selling pressure also comes from the spot market, not just derivatives ;

• The SOL price is heading for its lowest weekly close since late August, suggesting a significant technical break.

Therefore, the current behavior of the Solana derivatives market does not show regained confidence, but rather an imbalance where heavy leverage use could amplify the ongoing correction.

Network Fundamentals Decline : Solana Adoption Slows Down

Beyond signals from derivative markets, Solana’s on-chain data also show signs of weakness. Indeed, the total value locked (TVL) in Solana’s DeFi ecosystem has dropped 16 % over the past seven days.

At the same time, the number of daily transactions has declined by 11 %, indicating a slowdown in on-chain activity. This pullback comes as Solana faces increasing competition from other layer 1 blockchains, in a context where technical innovation alone no longer suffices to maintain user traction.

The RSI (relative strength index) fell from 69 to 37 since September 18, indicating growing bearish momentum, though not yet in oversold territory.

Meanwhile, chart analysts observe an inverted “V” pattern, often a herald of bearish reversals. This pattern suggests a return to a support zone around $155, or even a deeper pullback to $120 if the movement continues. The contrast between these signals and the record open interest level triggers the specter of an imminent long squeeze.

In this context, several scenarios remain possible. A rebound could occur if the price manages to stabilize around the identified technical zones and if Solana’s development team manages to reactivate interest through innovations or strategic partnerships. Conversely, a lack of positive catalysts combined with persistent selling pressure could precipitate a more prolonged correction phase.