Solana Dips Below $130 Ahead of 11.2M SOL Token Unlock on March 1

Solana’s price has recently dipped to $126, hitting its lowest level since mid-October, as market participants prepare for the upcoming unlock of 11.2 million SOL tokens from the FTX bankruptcy estate on March 1. The release of these tokens is raising concerns about further selling pressure, contributing to Solana’s 9% drop in the past 24 hours and a more significant 27% decrease over the past week. FTX, which once held a large portion of Solana, has been steadily liquidating its assets to repay creditors as part of its ongoing bankruptcy process, and the latest token unlock is fueling worries about additional downward pressure on Solana’s price.

The decrease in Solana’s value is also mirrored in the declining activity within its decentralized finance ecosystem. The total value locked (TVL) in Solana’s DeFi sector has plunged from $12 billion in mid-January to $6.8 billion by the end of February, reflecting reduced demand and less overall confidence in the network’s prospects. This decline is further exacerbated by the downturn in memecoin trading, which had previously driven significant trading volumes and activity on the network.

From a technical standpoint, the outlook remains bearish. Solana has broken below a crucial support level of $127, with additional levels of support identified at $110 and $100. Although the Relative Strength Index (RSI) is at 23.92, indicating that the asset is deeply oversold, this does not necessarily point to an immediate rebound. The presence of persistent selling pressure is illustrated by the dominance of red candles on the price chart and the significant volatility shown in the Bollinger Bands.

Moreover, data from Counglass reveals a notable decline in open interest in Solana futures, from $7.4 billion in mid-January to just $3.7 billion at the end of February. This suggests that leveraged positions in Solana have been significantly unwound, further indicating a shift in market sentiment. While institutional interest in Solana remains, exemplified by filings for Solana exchange-traded funds (ETFs) by firms like VanEck and Franklin Templeton, ETF approvals are likely to take time, leaving Solana without immediate positive catalysts to spur a recovery.

Unless Solana can reclaim the $130 price point, the downtrend could gain momentum, with the $100 support level becoming a critical target for the price. Traders are closely monitoring these levels, and any decisive move below them could signal further bearish sentiment, while a rebound could indicate a potential recovery in the coming weeks.