Crypto Analysts Say $2.5 Billion of SOL Will Be Circulated, What Impact Will This Have on the Market?

In the complex territory of the cryptocurrency market, the dynamics of various digital currencies always touch the hearts of investors. Recently, SOL has become the focus of attention. According to relevant reports, crypto market maker Wintermute has extracted $38.2 million worth of SOL from Binance in the past 24 hours, a behavior that has attracted market attention. What's even more striking is that there is only one week left before the largest token unlock in Solana's history.

On March 1, 11.2 million SOLs will be unlocked for circulation, with a value of up to $2 billion. Such a large-scale unlocking will undoubtedly bring considerable impact to the market. In the market supply and demand relationship, a large amount of SOL flows into the market will increase its supply. According to the basic principles of economics, prices often face downward pressure when the supply increases without changing or decreasing demand.

This is true, and SOL prices have been under pressure recently. In the past 24 hours, its price has fallen by more than 7.5%, and has fallen to a nearly three-month low of $155. This price trend has made investors worried. The remarks of crypto analyst Artchick.eth have further aggravated market concerns.

Artchick.eth said that more than 15 million SOLs will be in circulation in the next three months, or about US$2.5 billion. Most of these SOLs that are about to be circulated are held by institutions such as Galaxy Digital, Pantera Capital and Figure. It is worth noting that these institutions were purchased through FTX auctions for $64 per SOL. This means that the SOL costs in the hands of these institutions are lower.

At the current SOL price, multiple VCs still hold huge profits. The huge gap between cost and current price gives these institutions considerable profit margins on SOL. Such a huge profit also makes the market full of speculation about the subsequent actions of these institutions.

Trader RunnerXBT pointed out that Galaxy Digital, Pantera and Figure held $3 billion, $1 billion and $150 million in SOL, respectively, unrealized profits. Such a huge unrealized profit has led the market to speculate that these institutions may sell their positions. Once these institutions sell SOL on a large scale, the supply of SOL in the market will further increase significantly.

With the current SOL price under pressure, more supply pouring into the market will undoubtedly put prices under greater downward pressure. In addition to the possibility of institutional sell-offs, the recent LIBRA meme coin scam endorsed by Argentine President Mile has also aggravated the market's panic.

In the cryptocurrency market, investor sentiment has an important impact on the direction of the market. The spread of panic will make investors more cautious and even choose to sell their assets to avoid risks. This kind of emotional transmission will also have a negative impact on the SOL market. When investors lose confidence in the entire cryptocurrency market, SOL is also unable to survive.

From the overall market situation, SOL's large-scale unlocking of circulation is not only a problem for SOL itself, but also an impact on the ecology of the entire cryptocurrency market. If the SOL price continues to fall, it may trigger investors' concerns about other related digital currencies, which will in turn trigger a chain reaction in the entire market.

In the cryptocurrency market, there is often a certain correlation between each digital currency. The fluctuations in SOL may affect the price trends of other digital currencies and even affect the flow of funds in the entire market. When investors lose confidence in SOL, they may transfer their funds to other relatively stable digital currencies.

For projects related to the Solana ecosystem, SOL's large-scale unlocking of circulation and price decline is a severe test. Many Solana-based projects have their developments closely related to SOL's price and market performance. If SOL prices continue to be down, the development of these projects may be hampered.

For example, some decentralized applications (DApps) based on Solana may reduce the number of users and reduce capital inflows due to the decline in SOL prices, which will affect the normal operation and development of the project. For ordinary investors who hold SOL, the price fluctuations of SOL are also directly related to their asset value.

In this case, investors need to pay close attention to market trends and make investment decisions with caution. For market regulators, it is also necessary to strengthen supervision of the cryptocurrency market to maintain market stability and fairness. Faced with the upcoming $2.5 billion SOL circulation, the cryptocurrency market is facing a severe test.