Ah, the phrase “Trouble in Paradise” could not be more aptly applied to the current state of the Solana (SOL) ecosystem. This once-celebrated L1 token now finds itself besmirched by the recent LIBRA memecoin debacle, which, if one may say, involved the president of Argentina, a touch of insider trading, and a staggering $4.3 billion evaporating in the blink of an eye. Quite the spectacle, is it not? 🎭
As rival factions take delight in Solana’s misfortunes, a rather grand SOL token unlock event looms, promising to add further fuel to the already blazing inferno of selling pressure for this sixth-largest cryptocurrency. One might wonder if it is wise to hold, short, or sell. 🤔
To Purchase Solana is to Dance with Danger
Last month, the enigmatic artchick.eth, a commentator of some repute in the crypto realm, laid bare Solana’s token unlock schedule for the year 2025. With a current token inflation rate of 4.715%, it is anticipated that over the next three months (Feb-Mar-Apr), a staggering 15 million SOL tokens, valued at over $7 billion, shall grace the circulating supply. Quite the influx, indeed! 💸
The analyst remarked,
“The majority of this SOL was procured from FTX auctions at $64 by Galaxy, still a rather healthy profit. By the time this SOL unlocks, another ~$1B of SOL will be produced via inflation and likely dumped as well.”
In a similar vein, RunnerXBT, a trader of some note, declared that this is a “dangerous” juncture for those contemplating the purchase of Solana. He noted that companies such as Galaxy, Pantera, and Figure stand poised to extract $3 billion, $1 billion, and $150 million in unrealized gains once the SOL unlocks transpire. One cannot help but chuckle at the irony! 😂
It appears that the majority of these companies are inclined to sell their allocations, as the incentive to hold SOL diminishes amidst a market sentiment that grows ever more dismal, exacerbated by the recent LIBRA memecoin incident.
In a valiant attempt to quell the current FUD surrounding the unlocks, Kelly Greer, managing director at Galaxy, asserted that the impending unlock constitutes a mere 2.31% of the total supply and market cap, with Solana boasting $3.6 billion in 24-hour spot volumes. The implication being that the market shall likely absorb the selling pressure as the unlock approaches. How reassuring! 🙄
Consequently, Deftsuo, a technical analyst, expressed the belief that the SOL FUD is “hitting a peak.” The analyst proclaimed,
“Max fud is aligning all at once. It’s a fade, in my opinion. The Firedancer upgrade and a SOL ETF (with staking likely integrated) are on the horizon for 2025-2026.”
Is Shorting Solana the Most Obvious Course of Action?
At present, a clear directional bias for SOL remains elusive, yet futures traders are presently engaging in the act of shorting Solana. Reetika, a trader of some distinction, noted that short sellers have been “aggressive” over the past 24 hours, with aggregated open interest and funding rates diverging. With the current open interest rising and funding rates turning negative, the short-long ratio stands at a staggering 4:1, as reported by the anonymous trader, Tyler. Quite the conundrum! 🤷♂️
HORSE, a former prop-firm trader, also noted that this represents the most significant increase in open interest for SOL over a brief period. The trader highlighted that most of the open interest was added after the altcoin relinquished the $190 level. A most unfortunate turn of events! 😬
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2025-02-17 22:25