Examining Solana’s Token Unlock Schedule, Decreasing Network Activity, and Other Developments
Over the past few weeks, Solana [SOL] has encountered challenges, with the recent market downturn impacting the token. Within a month, the price of the altcoin plunged from $256 to $173, marking a significant 32% downturn. This price decline raises concerns about the future of one of the leading cryptocurrencies in the market.
On 1 March, FTX’s bankruptcy estate is set to unlock 11.2 million SOL, valued at $1.4 billion, as part of their asset liquidation process following the exchange’s collapse in November 2022. Notably, FTX had sold 41 million SOL to institutional investors like Galaxy Digital, Pantera Capital, and Figure Markets.
This impending unlock event could potentially introduce heightened volatility into the market, potentially leading to a further drop in SOL’s price.
Solana’s Ecosystem Controversies Impact Demand and Network Activity
The launch and subsequent controversy surrounding the LIBRA memecoin, which received promotion from Argentine President Javier Milei on social media, has sparked a major scandal. Following the President’s now-deleted tweet endorsing the memecoin, the Argentine flagship index S&P Merval experienced a 5% decline on 17 February.
While not the first project launched on the Solana blockchain, the LIBRA memecoin incident prompted Ben Chow, the CEO of Meteora, to resign from his leadership position at the DeFi platform.
Amidst these unfolding events, Solana’s network activity has taken a hit, with active addresses dropping below January’s levels and falling to numbers last observed in October 2024. Although still elevated compared to previous periods, the buzz and trading volume within the ecosystem have noticeably subsided.
Furthermore, total transaction fees have decreased to levels seen in late December, indicating a decline in trading activity. Despite these trends, Solana continues to demonstrate robust long-term performance, boasting daily revenues nearly ten times higher than Ethereum [ETH], although its total value locked (TVL) significantly lags behind.
From a price perspective, a bearish pattern has emerged, as SOL relinquished the $180 support level and traded below the $175 Fibonacci retracement mark. The bearish price movement suggests a potential bounce towards the $180-$190 range; however, a downward trajectory towards $157 and beyond seems likely in the near future given the current bearish momentum.