Solana (SOL) has experienced a significant price decline, dropping below the $130 mark to reach $126. This represents its lowest valuation since mid-October, driven largely by investor anxiety over an upcoming release of 11.2 million SOL tokens linked to the FTX bankruptcy proceedings.
Market data indicates that SOL has fallen by 9% in the past 24 hours and 27% over the last week. The anticipation of this substantial token unlock, valued at approximately $1.3 billion, has intensified fears of increased selling pressure in an already bearish market environment.
Market Context and FTX Liquidation Impact
FTX, once one of the largest holders of Solana, has been systematically liquidating its digital asset holdings as part of its court-mandated bankruptcy restructuring. To date, the estate has sold over 41 million SOL tokens to institutional buyers such as Galaxy Digital, Pantera Capital, and Figure Markets.
The upcoming unlock event scheduled for March 1 has raised serious concerns among traders and investors. The sheer volume of tokens entering the market could exacerbate the current downtrend, particularly if a significant portion is sold immediately.
DeFi Activity and Memecoin Trading Slowdown
The reduced demand for SOL is also reflected in on-chain activity. The Total Value Locked (TVL) within Solana’s decentralized finance ecosystem has declined sharply from over $12 billion in mid-January to just $6.8 billion by the end of February.
This contraction is closely tied to the cooling interest in memecoin trading, which had previously driven substantial transaction volumes and network usage on Solana. As speculative activity wanes, so does the immediate utility and trading demand for SOL.
👉 Track real-time DeFi metrics and trends
Technical Analysis and Price Trajectory
From a technical standpoint, Solana has broken below the critical support level of $127. Analysts are now monitoring the next major support zones near $110 and $100.
Despite the Relative Strength Index (RSI) reading of 23.92—indicating severely oversold conditions—there is no strong signal of an imminent price reversal. Historical data shows that oversold assets can remain under pressure for extended periods.
Bollinger Bands are indicating high market volatility, with red candlesticks continuing to dominate daily charts. This suggests that selling pressure remains persistent. If SOL fails to reclaim the $130 level, a further decline toward the $110–$100 range becomes increasingly likely.
Conversely, a shift in market sentiment could allow SOL to rebound toward the $150–$166 resistance zone. Traders are closely watching for a decisive price movement in either direction.
Futures Market and Institutional Sentiment
Data from Coinglass reveals a significant reduction in open interest for Solana futures contracts. Amounts have dropped from $7.4 billion in mid-January to $3.7 billion by February 28, indicating that leveraged traders have largely exited their positions.
This decline in futures activity aligns with the broader trend of risk reduction across crypto markets. While asset management firms like VanEck and Franklin Templeton have submitted applications for Solana-based exchange-traded funds (ETFs), the approval process is expected to take considerable time. These developments are not likely to serve as short-term catalysts for SOL’s price.
Frequently Asked Questions
Why is Solana’s price dropping?
Solana is facing downward pressure due to a combination of a major token unlock from the FTX estate, reduced DeFi activity, and a slowdown in memecoin trading. These factors are contributing to increased sell-side pressure and decreased demand.
What is the significance of the FTX token unlock?
The unlock involves 11.2 million SOL tokens worth over $1.3 billion. Since these tokens are likely to be sold to repay creditors, the event is anticipated to introduce significant additional supply into the market, potentially driving prices lower.
What are the key support levels for SOL?
Critical support levels to watch are near $110 and $100. If SOL fails to hold above these zones, further declines could occur. Traders are also monitoring the $130 level as a potential resistance point for any recovery attempts.
Is Solana oversold?
Yes, technical indicators like the RSI show that SOL is in oversold territory. However, this condition does not guarantee an immediate price rebound, as markets can remain oversold during extended downtrends.
Are Solana ETFs being considered?
Yes, financial institutions including VanEck and Franklin Templeton have filed for spot Solana ETFs. However, regulatory approval is uncertain and may take months or even years, meaning these are not near-term price catalysts.
How has memecoin activity affected Solana?
Memecoin trading previously generated high network activity and transaction fees on Solana, increasing demand for SOL. The recent decline in this activity has reduced network usage and contributed to lower prices.