Trading Volume Plummets 99% as Price Dips Below $130 Before Major Unlock

TLDR

• Solana (SOL) has dropped to $126, marking a 27% decline over the past week, with the price at its lowest since October as traders anticipate an 11.2M SOL token unlock from FTX bankruptcy estate on March 1.
• On-chain transfer volume has dramatically decreased from $1.99 billion in November to just $14.57 million, representing a 99% decline in activity.
• Total Value Locked (TVL) in Solana’s DeFi ecosystem has fallen from $12 billion in mid-January to $6.8 billion by February 28, 2025.
• Open interest in Solana futures has been cut in half, dropping from $7.4 billion to $3.7 billion, indicating a substantial reduction in leveraged positions.
• While institutional interest continues with ETF filings from firms like VanEck and Franklin Templeton, immediate catalysts remain limited.

Solana’s price has fallen to $126, marking its lowest point since mid-October, as the cryptocurrency market braces for an upcoming token unlock from the FTX bankruptcy estate. The price movement represents a 9% decline in the last 24 hours and a 27% drop over the past week.

The imminent unlock of 11.2 million SOL tokens, valued at approximately $1.3 billion at current prices, has created uncertainty in the market. This release is part of the ongoing FTX bankruptcy proceedings, where the estate has been liquidating assets to repay creditors.

Previous sales have seen 41 million SOL tokens distributed to prominent firms in the cryptocurrency space, including Galaxy Digital, Pantera Capital, and Figure. These systematic sales have already placed downward pressure on Solana’s price in recent months.

The decline in price coincides with a dramatic reduction in on-chain activity. Transfer volume has plummeted from $1.99 billion in November to just $14.57 million, representing a 99% decrease in overall network activity.

Technical indicators suggest potential further downside risk for Solana. The cryptocurrency has broken below the crucial support level of $127, with the next major support zones identified at $110 and $100. The relative strength index (RSI) currently sits at 23.92, indicating oversold conditions.

The Solana DeFi ecosystem has experienced a notable cooling period. Total Value Locked (TVL) has decreased from $12 billion in mid-January to $6.8 billion as of February 28, according to data from DeFiLlama. This reduction in DeFi activity has contributed to decreased demand for SOL tokens.

Markey Anaclasis

Market data from Coinglass reveals a sharp decline in futures market activity. Open interest in Solana futures has dropped from $7.4 billion in mid-January to $3.7 billion on February 28, indicating a substantial reduction in leveraged trading positions.

The recent downturn in memecoin trading volume has also impacted Solana’s ecosystem. Previously, the platform had experienced high trading volumes driven by memecoin activity, but this catalyst has diminished in recent weeks.

Bollinger Bands analysis shows high levels of volatility in SOL trading. Red candles continue to dominate recent trading sessions, suggesting persistent selling pressure in the market.

While institutional interest remains present, with firms like VanEck and Franklin Templeton filing for Solana ETFs, these potential catalysts may take time to materialize as regulatory approval processes continue.

The price has now entered a critical testing phase at the $126 level. If this support fails to hold, technical analysis suggests the next major support zones lie in the $110-$100 range.

Trading volumes across major exchanges have shown consistent selling pressure, with bears maintaining control of market momentum in recent sessions.

The upcoming token unlock on March 1 represents a key event for market participants to monitor. The release of 11.2 million SOL tokens could introduce additional supply pressure to the market.

Short-term price action will likely be influenced by how quickly and in what manner the unlocked tokens are distributed or sold into the market.

At press time, Solana trades at $126, with 24-hour trading volume reaching $14.57 million across major exchanges.