Solana (SOL) led losses among the top 50 cryptocurrencies, dropping 10% in the past 24 hours to $164.2 as of Monday morning in Europe. The token has declined 19% over the past week. What’s behind the slide?
FTX Repayment Factor
Today, FXT, the crypto exchange that went bankrupt in 2022, has started repaying its creditors in cryptocurrencies, including both institutional and retail investors, beginning with those who held $50,000 or less.
Sponsored
A total of 11.2 million SOL tokens, valued at approximately $2.06 billion, will be unlocked on March 1, 2025. Reports that this newly released liquidity could put significant downward pressure on SOL’s price have already raised concerns in the market.
One of the largest buyers of SOL on the FTX exchange was Galaxy and Pantera Capital, acquiring $1.6 billion worth of Solana at $64. The second-largest buyer was Pantera Capital, along with smaller holders, who purchased nearly $1.3 billion worth of SOL at approximately $95.
“Solana’s market cap may be around $100 billion, but that doesn’t mean there’s enough liquidity to absorb a massive sell-off. If they decide to dump, the price could take a serious hit,” crypto community members have noted.
On-Chain Metrics Reflect the Sentiment
Solana’s active addresses hit a five-month low on February 15, with just over 8.3 million users, per Glassnode. The number has since risen to 10 million, but SOL’s price has fallen, suggesting selling pressure and worsening sentiment.
According to Glassnode’s data, Solana’s total transfer volume plunged from $2 billion in mid-November to just $23 million today.
Solana remains a top network for memecoin creators. Platforms like Pump.fun, which allow users to launch memecoins without technical knowledge or initial capital, fueled a memecoin bubble in 2024.
On The Flipside
- Several asset management firms have filed applications with the US Securities and Exchange Commission (SEC) to launch Solana exchange-traded funds (ETFs) and the SEC has acknowledged these filings.
Why This Matters
Solana’s price drop signals broader market concerns, with the upcoming token unlock adding volatility. A prolonged downturn could impact investor confidence, capital inflows, and developer activity.
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