Solana’s price has dropped to $135, marking a 15% decline in one day and 56% over the month. The downturn is linked to a significant upcoming token unlock of 11.2 million SOL. Institutional interest persists, but market sell-offs and reduced demand for meme coins have amplified the downward trend. A bearish outlook is evident with critical support levels at $130-$140, facing the risk of further declines.

Solana’s price has recently plummeted to its lowest level since November, currently trading around $135, which reflects a significant 15% decline within a single day. Over the past week and month, the cryptocurrency has endured declines of 17% and 56%, respectively, as reported by crypto.news. This decline occurs amidst a backdrop of increasing sell pressure linked to an impending unlock of 11.2 million SOL tokens.

Despite rising institutional interest, including filings for Solana exchange-traded funds from major asset managers like Franklin Templeton and VanEck, the altcoin faces substantial downward pressure. The broader cryptocurrency market has experienced a dramatic sell-off, eliminating over $325 billion from market capitalization since last Friday. While Bitcoin has shown a modest decline, altcoins like Solana have suffered more significantly, ranking among the top ten cryptocurrencies facing substantial losses.

Additional contributing factors to Solana’s price drop include decreased demand for meme coins following the Libra scandal, which had previously fueled Solana’s activity. The technical outlook for SOL remains bearish as market maker Wintermute has withdrawn $38 million worth of SOL from Binance. This action foreshadows concerns regarding the upcoming $2-billion SOL token unlock event scheduled for March 1, likely exacerbating downward pressure on Solana’s price.

Renowned crypto analyst Artchick.eth has identified that over the next three months, approximately 15 million SOL—valued at around $2.5 billion—will enter circulation. These tokens were acquired at $64 each during FTX auctions by firms such as Galaxy Digital, Pantera Capital, and Figure, raising concerns that they might sell their holdings amid diminishing market sentiment.

From a technical perspective, Solana finds itself in a pronounced downtrend, trading substantially below both its 50-day and 200-day Weighted Moving Averages. A death cross is developing as the 50-day Weighted Moving Average trends below the 200-day Average, suggesting a potential for additional decline. Key support levels to monitor are between $130 and $140, with a risk of a further drop to $120 if these levels are breached. Resistance appears in the $160 to $180 range, which corresponds with earlier consolidation zones.

In summary, Solana’s recent price drop is largely attributed to the anticipated token unlock of over 11.2 million SOL. The withdrawal of a significant amount of SOL by Wintermute has only intensified existing selling pressures. However, the aggressive sell-off has also positioned SOL within oversold territory, which could pave the way for a short-term recovery. For sustained upward movement, Solana will need to overcome resistance levels above $160 to change the prevailing market sentiment favorably.

In conclusion, Solana’s sharp price movement underscores the impact of external market pressures and forthcoming token release events. While the immediate outlook remains bearish due to significant author contributions and institutional selling activity, the potential for a temporary recovery exists if key support levels hold. Ultimately, a substantial recovery will depend on the ability to exceed previously established resistance levels.

Original Source: crypto.news

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