Solana (SOL) has suffered a sharp decline, dropping to $135, marking its lowest price since October 2024. The token has fallen 15% in the past 24 hours, while weekly and monthly declines stand at 17% and 56%, respectively, according to crypto.news.
The sell-off comes amid mounting selling pressure ahead of Solana’s largest token unlock, which will release over 11.2 million SOL into circulation on March 1.
Market-Wide Downturn and SOL’s Struggles
While institutional interest in Solana has been growing, with asset managers like Franklin Templeton and VanEck filing for Solana-based ETFs, SOL has still struggled amid broader market weakness.
Since Friday, the crypto market has lost over $325 billion in market cap, with Bitcoin (BTC) dipping only modestly, while altcoins—especially Solana—have taken a bigger hit.
Additional factors contributing to SOL’s decline include:
- The post-Libra meme coin slowdown, as Solana previously benefited from the heightened activity of meme coin trading earlier in 2024.
- A major withdrawal by crypto market maker Wintermute, which removed $38 million worth of SOL from Binance, likely signaling expectations of further price drops.
- Concerns about upcoming token unlocks, with 15 million SOL worth approximately $2.5 billion set to enter circulation over the next three months.
The Impact of the 11.2M SOL Unlock
One of the primary concerns among traders is the effect of the upcoming 11.2 million SOL unlock. Historically, large token unlocks increase circulating supply and often lead to increased selling pressure, particularly when market conditions are already bearish.
Crypto analyst Artchick.eth highlighted that many of these unlocked tokens were acquired at just $64 per SOL in FTX’s auctions by firms like:
- Galaxy Digital
- Pantera Capital
- Figure
With minimal incentive to hold SOL given the worsening market sentiment, many investors fear these firms will take profits, further accelerating SOL’s downturn.
Technical Analysis: Further Downside Possible?
From a technical perspective, Solana is in a strong downtrend, trading well below its 50-day ($196.38) and 200-day ($198.63) Weighted Moving Averages (WMA).
- A death cross is forming, a bearish signal that occurs when the 50-day WMA crosses below the 200-day WMA, indicating further downside risk.
- Key support levels to watch: $130-$140, with a potential dip to $120 if selling pressure persists.
- Resistance is between $160-$180, aligning with past consolidation zones.
Can SOL Rebound?
While SOL’s aggressive sell-off has pushed it into oversold territory, making a short-term relief bounce possible, a sustained recovery will require SOL to reclaim resistance above $160.
If buyers step in at key support levels, Solana could temporarily rebound. However, with the largest SOL unlock in months approaching, selling pressure remains a dominant force in the market.
For now, Solana’s price action remains under pressure, and traders are closely watching the token unlock event on March 1 for further signs of market movement.
