In the cryptocurrency market, Solana (SOL) is experiencing significant declines, dropping more than 9% today. Over the past week and month, losses amounted to 16% and 9%, respectively. This downturn comes amid growing concerns over upcoming large token unlocks that add pressure to investor sentiment.
Major Token Unlocks
A substantial event is set for March 1, 2025, with about 11.2 million SOL, valued at approximately $1.75 billion at current prices, scheduled for unlock. This represents around 2.23% of the total supply and is among the largest in Solana's history. Much of this SOL originates from FTX bankruptcy auctions, purchased at an average price of $64 by entities like Galaxy, suggesting potential profit-taking. This event is contributing to market uncertainty and selling pressure.
Is More Dip Ahead?
On Solana's daily chart, after facing rejection from the ascending resistance trendline from its new all-time high of $295 on January 19, SOL has been in a downtrend. The current bearish momentum has driven its price down to $153 today, after failing to hold support at $155. The next major support lies around $126, a critical demand zone. The 50 moving average, currently around $173, is now acting as overhead resistance. Furthermore, the MACD indicator shows increased bearish momentum, with the signal line crossing below the MACD line, indicating dominant selling pressure.
Final Thoughts
With the upcoming token unlock event and deteriorating technical indicators, Solana could be positioned for further downside in the short term. However, strong demand zones near $126 and historical investor interest might offer a rebound opportunity if buying pressure increases at those levels. Investors should closely monitor key support levels and broader market trends before making trading decisions.
Considering the forecasts and technical indicators, Solana faces short-term pressure. Yet, strong demand zones and historical interest may provide support if buyers step in.
