{"id":47536,"date":"2025-02-25T08:48:39","date_gmt":"2025-02-25T08:48:39","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=47536"},"modified":"2025-02-25T08:48:39","modified_gmt":"2025-02-25T08:48:39","slug":"2b-solana-unlock-incoming-is-it-time-to-hold-onto-your-sol-or-sell-it","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=47536","title":{"rendered":"$2B Solana unlock incoming\u200a\u2014\u200aIs it time to hold onto your SOL or sell it?"},"content":{"rendered":"

$2B Solana unlock incoming\u200a\u2014\u200aIs it time to hold onto your SOL or sell\u00a0it?<\/strong><\/h3>\n

On March 1, 11.2 million SOL tokens are scheduled to be unlocked. How will traders respond ahead of this unlock event\u200a\u2014\u200awill they hold, short, or sell their Solana positions?<\/p>\n

Solana Token Unlock\u00a0Schedule<\/a><\/p>\n

The current state of the Solana ecosystem<\/a> is marked by some unprecedented challenges. The once-celebrated Layer 1 coin is now facing a wave of negative attention due to the recent LIBRA memecoin scandal and a decrease in network activity. The LIBRA controversy has involved high-profile figures, including the president of Argentina, allegations of insider trading, and a huge loss of over $4.3 billion in value within just 24\u00a0hours.<\/p>\n

As competing communities seized the opportunity to criticize Solana\u2019s recent challenges, a significant unlocking of SOL coins has added more fuel to the fire. This event could increase selling pressure for the sixth-largest cryptocurrency.<\/p>\n

Buying Solana Now is \u201cNot\u00a0Safe\u201d<\/h3>\n

Last month, an anonymous crypto commentator known as artchick.eth provided an overview<\/a> of Solana\u2019s token unlock schedule set for 2025. While Solana has a current token inflation rate of 4.715%, over the next three months (Feb-Mar-Apr), over 15 million SOL tokens worth over $2.46 billion will enter the circulating supply.<\/p>\n

The analyst\u00a0said,<\/p>\n

\u201cGalaxy bought most of its SOL holdings at $64 during the auctions held by FTX, leading to a significant profit. By the time this SOL unlocks, approximately an additional $1 billion worth of SOL is expected to be generated through inflation, which will likely flood the\u00a0market.\u201d<\/p>\n

RunnerXBT, a crypto trader, warned that the current<\/a> environment presents significant risks for acquiring Solana. During a discussion about the upcoming unlock event, he pointed out that companies such as Galaxy, Pantera, and Figure stand to gain substantial unrealized profits of $3 billion, $1 billion, and $150 million, respectively, once the SOL unlocks take\u00a0place.<\/p>\n

It can be inferred that many of these companies are inclined to divest their allocations as the current market sentiment is deteriorating. This situation has been further aggravated by the recent LIBRA memecoin incident, which has diminished the incentive to retain\u00a0SOL.<\/p>\n

In this context, Kelly Greer, the managing director at Galaxy, sought<\/a> to alleviate concerns regarding the current FUD surrounding the upcoming unlocks. Greer emphasized that the forthcoming unlock represents just 2.31% of the total supply and market capitalization. Additionally, with Solana experiencing a substantial $3.6 billion in spot trading volume over the past 24 hours, it is likely that the market will be able to absorb any resulting selling pressure as the unlock event approaches.<\/p>\n

Also, Deftsuo, a technical analyst, noted that the fear, uncertainty, and doubt (FUD) surrounding SOL is reaching its highest point. The analyst mentioned<\/a>,<\/p>\n

\u201cMax fud is aligning all at once. It\u2019s a fade, IMO. Firedancer upgrade and a SOL ETF (with staking likely integrated) coming in 2025\u20132026.\u201d<\/p>\n

Is shorting Solana the Safest\u00a0trade?<\/h3>\n

The directional bias for Solana (SOL) is currently unclear. However, futures traders have been actively shorting the asset. Reetika, a crypto trader, noted that short sellers have been \u201caggressive\u201d over the past few days, resulting in a divergence between aggregated open interest and funding rates. With open interest on the rise and funding rates turning negative, the short-to-long ratio stands at 4:1, according to an anonymous trader named\u00a0Tyler.<\/p>\n

HORSE, a former prop firm trader, added<\/a> that the recent surge in open interest (OI) for SOL is the most substantial seen over a brief timeframe. The trader emphasized that a significant portion of this OI build-up occurred after the altcoin dropped below the $190\u00a0mark.<\/p>\n

From a technical standpoint, Solana\u2019s daily chart suggests that it has already factored in, at least partially, the anticipated unlock event. The event has been widely known for some time, and many analysts have been evaluating its potential impact. As a result, prices have declined by 34%<\/a> over the last month. Yet, losing $180 support could worsen selling pressure and push prices down to the order block between $168 and $155, formed in November\u00a02024.<\/p>\n

Another significant trend reversal may be on the horizon with the potential for a bearish flip of the 200-day EMA. Solana failed to secure a close above $190 on February 17, this marked the first time since October 10, 2024, that it closed below this crucial indicator. This development signaled the onset of a sharp decline for the altcoin in the weeks\u00a0ahead.<\/p>\n

Solana Has More Challenges: A decline in network activity and congestion issues<\/h3>\n

Solana, currently ranked as the sixth largest cryptocurrency<\/a>, has experienced a 6% decline in the last 24 hours, trading at $165. This downturn comes amidst a broader market decline of 1.22%. Over the course of the past week, Solana\u2019s value has dropped nearly\u00a010%.<\/p>\n

Solana has long praised its high-speed, low-cost transactions as a competitive advantage, but recurring congestion issues have cast doubt on its scalability. Recent network slowdowns have led to failed transactions and delays, frustrating users and developers. Despite the Firedancer upgrade in development, congestion remains a challenge, particularly during periods of high trading activity.<\/p>\n

Solana\u2019s recent decline over the past week has paralleled a reduction in on-chain activity within its ecosystem. According to Ali<\/a>, a crypto analyst, the number of wallets that hold more than 100 Solana has decreased by 2.24% in the last two weeks, from 154,653 to\u00a0151,184.<\/p>\n

According to insights from the on-chain analytics platform Lookonchain<\/a>, the Solana blockchain experienced a significant outflow of $772 million in USDT and USDC stablecoins over the course of a week. During the same period, Ethereum\u2019s USDT and USDC supply increased by $1.1\u00a0billion.<\/p>\n

On January 19, 2025, Solana (SOL) reached a high of $295, seemingly returning to the peak of power; however, just a month later, this so-called \u2018high-performance public chain flagship\u2019 ran aground on February 18, sinking to $165, a decline of nearly\u00a040%.<\/p>\n

This crash represents not only a loss of market value but also a collapse of confidence\u200a\u2014\u200aonce seen as Ethereum\u2019s \u2018low-cost killer,\u2019 Solana has now nearly lost its advantage in transaction fees, with a mere $0.28 difference from Ethereum\u2019s mainnet average gas fee, raising doubts about whether Solana\u2019s technological narrative is indeed becoming ineffective.<\/p>\n

According to CoinGlass data<\/a>, Solana\u2019s open interest (OI) has been on the rise, yet negative OI-weighted funding rates indicate a decline in SOL\u2019s price. This negative funding suggests that short sellers are compensating long positions to maintain their trades, contributing to the prevailing bearish sentiment and leading to oversold conditions for\u00a0SOL.<\/p>\n

Solana DEX Volumes Plunge 91% in 30\u00a0Days<\/h3>\n

Daily DEX Volumes on Solana (USD). Source: <\/strong>DeFiLlama<\/strong><\/a><\/p>\n

After reaching a peak of $35.5 billion in daily trading volume on Jan. 17, decentralized exchange (DEX) activity on Solana has plummeted to $3.1 billion as of Feb. 17. The surge in volume was largely fueled by the hype surrounding the Official Trump (TRUMP) memecoin, which skyrocketed to a $15 billion market cap following public support from former U.S. President Donald\u00a0Trump.<\/p>\n

While Solana\u2019s DEX volume declined by 20% over the past week, other blockchain networks experienced contrasting trends. Some platforms saw significant growth, with key contributors such as Thena doubling its volume, Uniswap expanding by 61%, and DODO surging 53% between Feb. 10 and Feb.\u00a017.<\/p>\n

The Libra memecoin saga has also weakened confidence in the ecosystem<\/h3>\n

The sudden rise of memecoins such as Bonk and Dogwifhat<\/a> drew billions of dollars into the Solana ecosystem.<\/p>\n

Both dog-themed memecoins topped $4 billion in market capitalization before retracing in December and January, according to data<\/a> from CoinGecko.<\/p>\n

In the fourth quarter of 2024, application revenues on Solana increased by 213%, primarily due to memecoin speculation, according to a report by crypto research firm\u00a0Messari.<\/p>\n

Insider selling and significant losses for retail investors are negatively impacting sentiment within Solana\u2019s memecoin ecosystem. \u201cThe issues emerging now are severely harming the SOL ecosystem,\u201d stated<\/a> Runner XBT, a pseudonymous trader, in a post on February\u00a016th.<\/p>\n

LIBRA burned $4.4 billion in hours. Source: The Kobeissi\u00a0Letter<\/a><\/p>\n

On Feb. 14, Libra (LIBRA)<\/a>, a crypto seemingly endorsed by Argentine President Javier Milei, erased some $4.3 billion in market capitalization within hours of launching.<\/p>\n

Milei initially promoted the coin on X but has since removed his post. He is now facing legal action in Argentina for allegedly deceiving investors. He denied the allegation, but later, he admitted to meeting the project\u2019s team.<\/p>\n

Since January, traders have lost approximately $2 billion across 800,000 wallets on Official Trump (TRUMP), US President Donald Trump\u2019s official memecoin.<\/p>\n

The fully diluted value of TRUMP is down roughly 75% from highs of more than $70 billion to around $17 billion as of Feb. 17, according<\/a> to CoinGecko. Roughly 80% of TRUMP\u2019s supply is held by insiders, which is a big red flag in\u00a0crypto.<\/p>\n

The launch of TRUMP was described by Westie, a research analyst at Blockworks, as \u201cthe clearest demonstration of the insider game reaching its peak,\u201d according to a February 16 article on X.<\/a> Meanwhile, Solana<\/a> has outperformed Ethereum<\/a>, the largest layer-1 network by total value locked, in generating revenue, despite a slowdown in memecoin trading, as reported by DefiLlama.<\/p>\n

Conclusion<\/h3>\n

The $2 billion SOL unlock on March 1 adds to growing uncertainty around Solana. While some argue the market can absorb the selling pressure, concerns over network congestion, declining activity, and recent controversies like the LIBRA memecoin scam have weakened confidence.<\/p>\n

SOL has also struggled against Ethereum, with stablecoin outflows signaling shifting sentiment. Short sellers dominate, but the risk of a short squeeze\u00a0remains.<\/p>\n

Despite setbacks, Solana still generates strong revenue and retains a loyal ecosystem. The key question is whether the current dip is a buying opportunity or the start of a prolonged decline. As the unlock approaches, traders should prepare for volatility and potential market\u00a0shifts.<\/p>\n

$2B Solana unlock incoming\u200a\u2014\u200aIs it time to hold onto your SOL or sell it?<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":"

$2B Solana unlock incoming\u200a\u2014\u200aIs it time to hold onto your SOL or sell\u00a0it? On March 1, 11.2 million SOL tokens are scheduled to be unlocked. How will traders respond ahead of this unlock event\u200a\u2014\u200awill they hold, short, or sell their Solana positions? Solana Token Unlock\u00a0Schedule The current state of the Solana ecosystem is marked by […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-47536","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/47536"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47536"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/47536\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}