Solana’s Price Plunges to Lowest Level Since November Amid Growing Selling Pressure

Solana’s price has taken a sharp downturn, plummeting to its lowest level since November, as selling pressure continues to mount ahead of a significant token unlock event. The cryptocurrency is currently trading at around $135, marking a 15% decline in just one day and a 56% drop over the past month.

Market-Wide Liquidations and Slowing Demand Contribute to Price Decline

The downturn in Solana’s price can be attributed to several factors, including the broader market sell-off, which has resulted in over $325 billion being wiped from the crypto market cap since Friday. Additionally, a slowdown in demand for meme coins following the Libra scandal has also contributed to the decline. Solana’s activity had been significantly driven by the hype surrounding meme coins earlier this year.

Upcoming Token Unlock Event Exerts Downward Pressure on Solana’s Price

The upcoming token unlock event, scheduled for March 1, is expected to release over 11.2 million SOL tokens into circulation, valued at approximately $2 billion. This event has led to Wintermute withdrawing over $38 million worth of SOL from Binance, indicating that the market maker is anticipating further downward pressure on Solana’s price.

Crypto analyst Artchick.eth has pointed out that in the next three months, over 15 million SOL, valued at approximately $2.5 billion, will enter circulation. Many of these tokens were acquired at $64 per SOL during FTX’s auctions by firms like Galaxy Digital, Pantera Capital, and Figure. The concern is that these companies are likely to sell their allocations, given the worsening market sentiment and minimal incentive to hold SOL.

Technical Analysis Indicates Strong Downtrend

On the technical side, Solana is currently in a strong downtrend, trading well below its 50-day and 200-day Weighted Moving Averages. A death cross is forming as the 50-day WMA crosses below the 200-day WMA, indicating the likelihood of further downside.

Key Support and Resistance Levels

The key support area to watch is around $130-$140, with a potential drop to $120 if this level fails. Resistance is between $160-$180, aligning with past consolidation zones.

Outlook for Solana’s Price Remains Bearish

Despite the steep and aggressive sell-off, which has pushed SOL into oversold territory, the outlook for Solana’s price remains bearish. For any sustained recovery, SOL would need to reclaim resistance above $160 to shift market sentiment in a more positive direction.

Investors should exercise caution and monitor the market closely, as the upcoming token unlock event and growing selling pressure may continue to exert downward pressure on Solana’s price.

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