Solana Yields 16%, But The Illusion May Be Short-lived

The digital asset market is going through a new crisis and displays a dominant color: blood red. Bitcoin is losing its position, Ethereum follows the trend, and altcoins suffer in silence. Yet, one resilient player stands firm: Solana. While its price has fallen to 125 dollars, it made a spectacular rebound of 16%. But for how much longer? With the shadow of massive token unlocks looming, the future of SOL seems uncertain.

Solana Facing Pressure: A Fragile Rebound

Since February 24th, Solana has been in free fall, reaching a low of 125 dollars on February 28th. However, the wounded beast has not said its last word: a 16% rally followed, thanks to the announcement of the launch of Solana futures by the Chicago Mercantile Exchange (CME). A beautiful glimmer of hope that, for now, is still waiting for approval from the Commodity Futures Trading Commission (CFTC).

But this rebound could very well be a flash in the pan. While SOL has tried to stabilize above 143 dollars, the true test lies ahead. A crucial resistance barrier looms at 160 dollars. Will it break through, or will we witness another brutal drop?

Especially since the Relative Strength Index (RSI) has recently been in oversold territory, a signal already seen in June 2023, when the SOL price was only 15 dollars…

The Massive Unlocking of SOL Tokens: A Ticking Time Bomb?

On March 1st, 11.2 million SOL will enter circulation, increasing the total token supply by 2.84%. A small percentage, but a big risk for price stability. Among the major beneficiaries of this operation are investors like Galaxy, Pantera, and Figure, who are eyeing colossal gains ranging from 150 million to 3 billion dollars.

History teaches us that the unlocking of digital assets is never trivial.

Keyrock Trading, after analyzing more than 16,000 similar events, predicts an 8% correction in the 30 days following this unlocking. And looking at recent performances, SOL has already plunged 60% in a month, raising concerns about an additional drop.

A certain Jeremy, a seasoned crypto analyst, does not hide his skepticism:

” SOL rebounded from 126 to 146 dollars in a few hours… but I have a feeling we will see an even lower bottom. “

What will the real impacts be? A massive liquidation? An unexpected stabilization? The coming weeks promise to be eventful for crypto enthusiasts.

• 11.2 million SOL released on March 1st;
• 2.4% of total supply impacted;
• 8% decline expected over 30 days post-unlock;
• 60% drop already recorded last month.

Can the Crypto Market Absorb the Shock?

In the face of this event, another factor raises concerns: the potential sale of tokens from the FTX legacy. These 11.2 million SOL, held by the former bankrupt empire, are worth approximately 2.03 billion dollars today. A risk of further dilution as Solana tries to maintain its momentum.

Some analysts, like those at XBTResearch, are being pragmatic. If the sale of FTX Estate is rapid, the pressure on SOL’s price will be strong. Conversely, if the funds are released gradually, Solana could absorb the shock in the long term. But who can really predict the behavior of such an unpredictable market?

Another factor to consider: the overall dynamics of digital assets. With persistent inflation, increasingly strict regulations, and struggling traditional markets, the context is not the most favorable.

So, will Solana manage to swim against the tide, or will it end up sinking with the rest of the altcoins?

Aside from the SOL price, the ecosystem itself is suffering. Recently, the number of active users has dropped by 40%. And to make matters worse, the Pump.fun debacle could well signal the end of memecoins on Solana. An erosion that raises the question: will the altcoin be able to maintain its resilience or is it on the brink of implosion?