Solana (SOL) Slips Below $160, Hit by Investor Anxiety Ahead of a Major Token Unlock from FTX

On February 24, SOL fell over 8.20%, touching $148.46, its lowest level this year. It hasn't managed to recover since and is currently trading around $156.

Solana (SOL) has fallen below the $160 mark due to investor concerns over a large token unlock from FTX. On February 24, SOL experienced an 8.20% drop, reaching $148.46, marking its lowest point for the year. Despite a brief recovery, SOL is still trading around the $156 level.

As March 1 approaches, 11.2 million SOL tokens, valued at approximately $1.77 billion, are set to be unlocked. These tokens are connected to FTX's bankruptcy proceedings, and there is concern that a significant portion could flood the market, driving prices down further.

Solana has faced declining investor confidence, losing 35% of its value over the past month, including a 13% dip last week. Its market capitalization has decreased by $10 billion, now standing at $78 billion. Trading activity on Solana-based decentralized exchanges (DEXs) has also seen a drop of nearly 37%, indicating that investors are pulling back.

Meanwhile, large traders appear to be preparing for more downside. According to data from Amberdata, put options, which are bets on the price dropping, accounted for 25% of all Solana-related derivative trades last week. This suggests that big investors, known as "whales," are bracing for additional losses.

The fate of Solana will depend on the market's response to these freshly unlocked tokens. If a large volume of these tokens enter exchanges simultaneously, it could impact SOL's price negatively. However, if there is sufficient demand and buyers emerge, the price could stabilize or even recover. With March 1 on the horizon, the market will be closely watched to determine the outcome.