Solana (SOL) Price Drops to $126 as FTX Unlock Sparks Investor Concerns

The current volatile crypto market is creating severe panic among investors. Solana (SOL), the sixth-largest cryptocurrency, dropped to $126, its lowest price since mid-October as investors look toward the upcoming token releases from the FTX bankruptcy estate.  

The price of SOL at the time of writing was $129.5, reflecting a 7.43% drop over the last 24 hours. Its value has fallen 55.87% since its all-time high of $294, raising concerns among investors about its prospect. If this decline continues, SOL might drop below $120 in the upcoming days.

Solana’s Price Decline and Market Pressure

Over the last week, Solana dropped 27% in value. Many investors believed that $127 was the lowest mark of SOL, but in just 24 hours, it plummeted to $125.74. This sudden drop affected the general market sentiments and created panic among investors, causing them to predict a new lower low of $100. 

• The underlying cause behind this drop is the likely release of 11.2 million SOL tokens in March.
• These tokens are the property of the FTX bank cryptocurrency exchange. The fear is that the massive dump will swamp the market, which will lead to further losses.
• Earlier, 41 million SOL tokens were issued to companies like Galaxy Digital, Pantera Capital, and Figure to allow FTX to repay its creditors.

Declining Activity in Solana’s DeFi Sector

The situation worsened as SOL’s decentralized finance (DeFi) ecosystem activity declined. SOLs’ data shows the total value locked (TVL) dropped from $12 billion in mid-January to $6.8 billion as of 28 February 2025. This drop mirrors the decrease in token demand after Trump’s inauguration. Additionally,  the Solana memecoin trading declined in the past weeks, reflecting the market’s vulnerability. 

Technical Indicators Show More Downside Risks

Market analysts are watching Solana’s technical data keenly, which currently are signaling more downside risks. The relative strength index (RSI) stands at 23.92, which implies that SOL is oversold. That is not always a promise of an immediate price reversal. 

Bollinger Bands also show extreme volatility, with selling pressure in recent trading sessions. If Solana cannot bounce back to $130, the price may go as low as around $100. On the other hand, if conditions alter, SOL can bounce back to around $150 to $166.

Futures Market and Institutional Demand

Data show that Solana’s future open interest has fallen significantly, from $7.4 billion in mid-January to $3.7 billion on February 28. This is a sign that leveraged positions are being closed out, which is creating further volatility.

Despite the decline in the market, large corporations still wish to invest in Solana. Investment companies like VanEck and Franklin Templeton have requested permission to launch Solana-based exchange-traded funds (ETFs). However, it is time-consuming to obtain ETF approvals, and there is nothing currently to drive SOL prices higher.

What’s Next for Solana?

The subsequent token release is another reason for SOL price volatility. If the market mops up the extra supply with minimal selling, it can uplift Solan’s future growth. But if sellers panic and rush to offload their stakes, the price may fall to as low as $100.

Traders and investors will keep a close watch on prices over the next few days, particularly around the crucial $130 level. If Solana is unable to recapture this level, the downtrend could accelerate. However, any positive news in the crypto world or institutional support could see SOL rebound. For now, prudence is the best option as Solana rides out volatile market conditions.