Solana Price Prediction: Bearish sentiment still exists after SOL approaches $160, is a pullback coming?

The price of Solana (SOL) has recently broken through the compression range of July, attracting market attention, especially before the release of the Federal Open Market Committee (FOMC) meeting minutes. Although SOL could potentially rise further by 5%, pushing towards $160, significant hedging activity in the options market has made traders cautious.

As of July 10, the Gate market shows that SOL is currently priced at 157.36, with a 24-hour rise of 2.83%.

Solana price breaks through the compression range before the FOMC minutes

The price of Solana has broken through its compression range since July, and market bullish sentiment is rising again. This breakout could drive the SOL price further up, approaching $160. However, the upcoming release of the FOMC meeting minutes complicates market sentiment, as this minutes typically trigger market volatility.

The FOMC minutes often provide important information regarding whether the Federal Reserve will raise interest rates and future economic policies, which can lead to significant market fluctuations, especially in the Options market.

SOL traders remain cautious: Options market bearish sentiment rises

Between July 7 and 9, there was a significant change in sentiment in the Options market. The Put/Call (P/C) ratio surged from 0.35 (bullish) to 1.19 (bearish), indicating that traders' expectations for a price drop have strengthened. This surge in bearish sentiment suggests that many traders are preparing for a possible pullback, especially if the FOMC minutes release hawkish signals, implying that the Federal Reserve will continue to raise interest rates.

The impact of bearish positions on SOL's mid-term breakout

The surge in bearish positions has led the market to question whether Solana's mid-term breakout can be sustained, or if a pullback is on the horizon. Currently, the open interest (OI) in the derivatives market remains around $7.1 billion, indicating that speculative interest in Solana has largely remained flat since July.

In contrast, the open interest during Q2 surged from $4 billion to over $7.1 billion. If the OI does not expand further, Solana's current breakout may just be a false breakout driven by speculative sentiment rather than supported by market demand.

Insufficient demand in the spot market

According to Coinalyze data, the cumulative trading volume (CVD) in the spot market saw a decline at the beginning of July, indicating insufficient demand in the spot market, which may suggest that the rise of Solana is not strongly supported by the spot market.

Despite the 11% growth in open interest during the same period, this indicates that the price fluctuations in July were mainly driven by leverage and speculation, rather than actual demand from the spot market. If the demand from the spot market does not significantly rebound, this rally may be short-lived or face a correction.

Solana ETF speculation and Q3 outlook

Looking ahead, the speculation around the Solana ETF may become a key factor in determining the price direction in Q3. However, this week's price movement of Solana is more likely to be influenced by forced liquidations.

If the forced liquidation pressure increases, the price of SOL may drop to $154.6, and may even approach $158 further, before then "hunting" the leveraged long positions located at $145. $145 is a key price level, as there are nearly 600 million dollars in long positions around this price level, making it a potential price attraction point.

Key Support and Resistance Levels for Solana Price

• Main support levels: $145, $131 (average cost level)
• Main resistance levels: $160, $158, $154.6

Conclusion: The market structure of SOL still needs to be followed

The rebound in Q2 shows that the Solana market is presenting a bullish structure after defending the realized price (the average cost basis of most SOL holders). However, if the price continues to fall below the realized price (currently at $131), it would mean that the bullish structure of the market may be undermined.