Solana’s Price Reaches $600 as Trader Forecasts Bullish Scenario Despite $2.5 Billion Unlock
Unquestionably, Solana [SOL] has emerged as the star performer of this market cycle, witnessing a remarkable 13x surge from $8 to nearly $300 within a record-breaking 18 months. Some investment firms, like Bitwise, have even suggested that the altcoin could potentially exceed $750 by the end of the current cycle.
Adding to the optimism is Bob Loukas, a well-known crypto trader, who has put forth an audacious forecast of $600 within two months.
“Based on my analysis of $SOL, it appears that there is mounting pressure that, once released, could lead to a rapid surge (<8 weeks) to $600. Multiple factors such as price movements, historical data, economic factors, prevailing narrative, and the current stage of the market cycle all point towards this trajectory.”
Providing some context, Solana has now positioned itself as the swiftest and most cost-effective blockchain alternative to Ethereum. The network has outperformed Ethereum on several fronts, with the exception of Total Value Locked (TVL) – a trend that Delphi Digital anticipates could result in Solana surpassing ETH by 2025.
Yet another significant milestone is Solana’s acceleration in stablecoin growth, outpacing Ethereum on a monthly basis.
Solana’s $2.5 Billion Unlocking
However, the Solana community might encounter challenges ahead of the impending unlocking event. Between February and April, more than 14 million SOL tokens are set to be unlocked.
In March, 9.7 million SOL tokens, valued at $2.5 billion, will be released into circulation. This could potentially influence market sentiment negatively. One user expressed concerns, stating,
“February marks the commencement, and March triples the unlocking from February, bringing $2.5 billion worth of previously acquired SOL tokens into circulation for sale. This occurs concurrently with influencers, who switch their allegiance frequently, hyping up projections of a $1000 price point while every SOL meme continues to dominate conversations incessantly.”
A prominent SOL proponent, Gumshoe, echoed similar sentiments and criticized the ‘influencers’ advocating for a $1k price target. He remarked,
“The unlocking phase poses the greatest risk, especially if we do not witness a broad upward market trend; under such circumstances, SOL’s performance may lag during market rebounds and corrections. Irresponsible predictions calling for a $1k price for SOL should not be taken seriously unless discussing an extended time horizon exceeding five years.”
Nonetheless, the analyst noted that the unlocked tokens, equivalent to 2.7% of the total supply, are likely to be divested gradually rather than all at once.
Meanwhile, large token holders have reduced their exposure in the futures market, indicating a probable subdued price movement over the upcoming weekend.
This trend is exemplified by the diminishing Whale vs. Retail delta (reflecting a decline in green bars). Historically, a decrease in whale participation (indicated by red bars) has consistently corresponded with downward price corrections in SOL.
Furthermore, there appears to be a rise in distribution activities, bolstering the notion that major market players have been cashing out profits following the recent surge to the $295 level.