Whale Bets Big on SOL: Liquidation Risks Rise with Leverage

Solana's (SOL) derivative market shows a disconnect from its falling prices due to an increase in leveraged coins being traded despite a decline in dollar-denominated Open Interest (OI).

The USD-denominated OI has decreased by around $3.66 billion, or 47.5%, since last year, but the OI for Solana has increased by nearly 21.6% and has risen to 52.87 million SOL.

This divergence suggests derivatives have not experienced broad deleveraging implied by dollar figures alone, and speculative positions remain high due to large amounts of leverage relative to holdings in coins.

Without significant spot buying pressure, this may create an environment where price movements become even more volatile due to increased sensitivity of price movements to leverage.

A whale has added significant leveraged risk through a 500,000 SOL long position using 20x leverage, which is likely to result in margin calls if Solana's price rapidly moves downward.