Market Sentiments Sour Around Solana Ecosystem

Market sentiments around the Solana ecosystem have soured, chiefly due to FTX set to unlock over 11 million SOL — valued nearly at $2 billion — next month.

The Solana ecosystem faces growing pressure as meme coin scandals escalate. Reports of insider trading and fraud collaborations have intensified negative sentiments.

Recent discussions were ignited by the LIBRA token saga involving Argentina’s President Javier Milei. Adding to the skepticism, the decentralized exchange aggregator, Jupiter, acknowledged its foreknowledge of a token launch, confirming it was a well-staged rug pull.

While negative social sentiments and price impacts are mounting, another concern has arisen for Solana. The bankruptcy estate of FTX has announced plans to unlock 11.2 million SOL, increasing the token’s circulating supply.

Solana Faces Unlock Worth 8% of Circulating Supply

Following the FTX repayment restart, creditors with under $50,000 in the collapsed exchange received up to $1.2 billion. Meanwhile, the estate plans to unlock 11.2 million SOL on March 1, sold at auction for customer repayments.

The estate has previously auctioned off 41 billion SOL following the notorious November 2022 collapse, selling at discounted prices to top firms like Galaxy, Pantera, and Figure.

For instance, Galaxy purchased 25 million SOL for $64 each, Pantera bought 13.67 million at $95, and Figure acquired 1.8 million at $102, yielding notable profits of 165%, 79%, and 66% on their investments, respectively.

Impact on Price?

Speculation is growing that Galaxy and the involved firms may liquidate these assets once unlocked, which could intensify supply and diminish demand. Analysts warn that investing in Solana now is risky due to rising skepticism and the potential for price declines, as nothing is preventing these firms from selling.

Should these negative sentiments persist, Solana risks further price drops, with current technical analysis indicating a bearish outlook after breaking down from a multi-month ascending triangle.

Ali Martinez suggests that Solana’s next price target is the 0.382 Fibonacci level at $165; it’s currently trading at $168.58, down 10% over the past week.

*Solana Price Analysis | Ali Martinez