Solana Bulls Add $12.5M Leverage as 21Shares ETF Withdrawal Triggers Short Volatility
Solana (SOL) held above $135 after 21Shares withdrew its Solana staking ETF application, a move that briefly dented sentiment but did not derail bullish positioning. Derivatives data show traders added roughly $12.5 million in notional bullish leverage to defend the $135 support; open interest rose 1.7% while the 8-hour funding rate flipped positive at 0.0027%, indicating bulls paid premiums to maintain long exposure. Long-to-short ratios hovered near 1.0, suggesting leverage additions came from longs covering rather than short accumulation. ETF flows reversed on Friday with $5.3 million of inflows after Thursday’s $8.3 million outflow, ending a one-day drawdown in a 22-day inflow streak since SEC approvals earlier in the year. Technically, SOL trades inside a falling wedge; a confirmed breakout above the upper trendline (daily close above ~$143 and breakout past $150–$152) could target $200–$220 (≈62% upside from current levels). Downside risk includes a retest near $120 (~29% downside). Key takeaways for traders: derivatives show active bullish defense via leverage and positive funding, ETF flows remain net supportive after a quick reversal, and technicals signal a defined breakout target if resistance is cleared. This is market reporting, not investment advice.
Bullish
The net effect is bullish. Although 21Shares’ withdrawal briefly pressured sentiment and caused ETF outflows, traders quickly added $12.5M in bullish leverage and open interest rose, while funding turned positive—clear signs that derivatives market participants defended SOL’s $135 support. ETF flows reversed to $5.3M inflows the next day, suggesting the ETF headwind was short-lived. Technically, SOL sits in a falling wedge where a confirmed breakout above ~$150–$152 could trigger a measured move toward $200–$220, offering substantial upside. Short-term impact: elevated volatility and testing of support near $135–$143; active traders may see range plays and leveraged long opportunities while watching funding and OI. Long-term impact: if inflows and derivative support persist and a breakout occurs, sentiment could shift materially bullish and attract broader capital (ETFs, spot buyers). Comparable past events: other token ETF-related setbacks (temporary ETF application withdrawals or approvals) have often produced short-lived sell pressure followed by restoration of flows and leveraged buying (e.g., earlier SOL/altcoin ETF flow swings in 2025). Risks remain—failure to hold $135 or a daily close below $120 would increase downside and could unwind leveraged longs.