FTX Fallout Solana Faces $2B Token Unlock Pressure

- Solana trading volume dropped by almost 24% - $200 million worth of SOL to be unlocked due to the FTX token release [Unblock Media] According to Solana news, Solana (SOL), which was once praised for its transaction speed, is now facing uncertainty related to the multibillion-dollar token release. The Solana token release has left investors in a state of tension due to declining trading volumes and liquidity concerns. Over the past week, Solana's trading volume dropped by 24%, reaching its lowest point since mid-December 2024. Analysts attribute this decline to macroeconomic uncertainty, a drop in investor confidence, and internal controversies. The negative sentiment has further worsened due to the recent LIBRA memecoin scandal, which wiped out $4.3 billion in market value in a single day. Solana's current price has seen a significant drop to $179, and investors are now considering the potential impact of the FTX token release and any catalysts that could reignite network growth. On March 1, 2025, over 11.2 million SOL tokens, valued at more than $200 million, will be unlocked from FTX assets. This constitutes 2.31% of Solana's total supply, but the psychological impact on investor sentiment could be substantial. This release event is part of a larger trend, with over 15 million SOL, valued at more than $7 billion, expected to be introduced to the market over the next three months. Crypto analyst artchick.eth pointed out that many firms acquired tokens for as low as $64 in FTX auctions, suggesting that major companies like Galaxy Digital, Pantera, and Figure could respectively see potential profits of $3 billion, $1 billion, and $150 million. Given that these firms are likely to realize profits sooner rather than holding long-term, market sentiment has turned bearish. However, industry insiders caution against immediate panic selling. Kelly Greer, Managing Director at Galaxy, highlighted that Solana’s 24-hour spot trading volume has remained at $3.6 billion, indicating the market might absorb the selling pressure without a fatal impact. Not all traders are convinced of an imminent collapse. Futures data shows a 4:1 short bias (investors predicting a decline), along with a surge in open interest. Former trader HORSE reported the largest increase in open interest for SOL in recent short-term periods, noting that many traders are doubling down on bearish positions as the price falls below the $190 support level. Some analysts believe the fear, uncertainty, and doubt (FUD) might have peaked. Technical analyst Deftsuo argued that the worst-case scenario might already be priced in. He highlighted positive developments such as the Firedancer upgrade and expectations for Solana ETFs to integrate staking mechanisms between 2025 and 2026. Technical indicators are mixed. If SOL fails to hold above $190 by February 17, it could trigger a bearish flip of the 200-day EMA, historically a significant trend reversal signal. If prices fall below $180, losses could accelerate towards the crucial support zone of $168-$155, last tested in November 2024. As the March 1 token release approaches, Solana stands at a crossroads. Long-term investors see potential in the network's continued development, but short-term volatility remains a major concern. The increasing selling pressure, declining trading volumes, and broader market uncertainty paint a complex picture.