Solana has suffered a sharp decline, dropping to its lowest level since November as selling pressure keeps mounting ahead of a major token unlock.
As of the time of writing, Solana (SOL) is sitting at $135 mark, down by 15% in just one day. On the weekly and monthly timeframes, it has declined by 17% and 56% respectively, according to crypto.news.
This marks Solana’s lowest price since mid-October. The price crash comes despite growing institutional interest in SOL, with asset managers like Franklin Templeton and VanEck recently filing for Solana exchange-traded funds.
This downturn in Solana’s price can be tied to several factors, most notably the broader market sell-off as reflected in over $325 billion wiped from crypto market cap since Friday. Although Bitcoin (BTC) dip has been relatively modest, altcoins have taken a bigger hit with Solana among the biggest losers among the top 10 coins by market cap.
Aside from the market-wide liquidations, SOL price’s turmoil can be attributed to a slowdown in demand for meme coins after the Libra scandal, which had been a significant source of Solana’s activity earlier this year.
Looking ahead, the outlook for SOL’s price remains bearish. Crypto market maker Wintermute has recently withdrawn over $38 million worth of SOL from Binance. This comes in the wake of the largest $2-billion SOL token unlock event slated for March 1, which will release more than 11.2 million SOL tokens into circulation. The withdrawal may mean that Wintermute is anticipating that the upcoming token unlock will exert further downward pressure on Solana’s price.
https://twitter.com/solidintel_x/status/1893960265181360329
In his recent post on X, crypto analyst Artchick.eth pointed out that in the next three months, over 15 million SOL—valued at approximately $2.5 billion—will enter circulation. Many of these tokens were acquired at $64 per SOL during FTX’s auctions by firms like Galaxy Digital, Pantera Capital, and Figure. The concern that most of these companies are likely to sell their allocations as there is minimal incentive to hold SOL given the worsening market sentiment.
https://twitter.com/digitalartchick/status/1891195013763383298
On the technical side, Solana is currently in a strong downtrend, trading well below its 50-day (196.38) and 200-day (198.63) Weighted Moving Averages. A death cross is forming as the 50-day WMA crosses below the 200-day WMA, indicating the likelihood of further downside.
In terms of structure levels, the key support area to watch is around $130-$140, with a potential drop to $120 if this level fails. Resistance is between $160-$180, aligning with past consolidation zones.
To sum up, Solana’s sharp decline seems to be driven by the upcoming token unlock, which will release over 11.2 million SOL into circulation. With Wintermute withdrawing a significant amount of SOL, selling pressure is mounting.
That being said, the steep and aggressive sell-off has pushed SOL into oversold territory, which could lead to a short-term relief bounce. If sellers exhaust and buyers step in at key support levels, a temporary rebound is possible. Still, for any sustained recovery, SOL would need to reclaim resistance above $160 to shift market sentiment in a more positive direction.
