- SOL will see about $340M in token unlocks in August
How will the unlocks affect SOL’s price with the current weak sentiment?
As a seasoned analyst with years of market experience under my belt, I see the upcoming $340M token unlocks for Solana (SOL) as a potential catalyst for price volatility. The sheer volume of tokens hitting the market could exacerbate an already weak investor sentiment, given the current choppy market conditions.
In August, Solana [SOL] is expected to release approximately $340 million worth of tokens into circulation, making it the token with the highest unlock value during this period. This significant release could potentially influence SOL’s market price as the overall market has shown volatility.
Will SOL’s price hold the supply pressure?
In response to the significant release of tokens, Wazz Crypto, a market expert and commentator, suggested that the pattern might become even more aggressive and quicken the selling off, or ‘dumping,’ of these tokens.
In my view, I believe that token unlocks may become increasingly exploitative over time. This is because investors and teams might feel pressured to sell off their tokens as they come to realize that there’s not a strong demand for the endless supply of tokens being generated.
Currently, when I’m writing this, there’s a generally balanced outlook among speculators regarding Solana (SOL), as indicated by the neutral trend in weighted sentiment on Santiment.
Despite recent developments, this past week has seen many investors and traders reducing their risk exposure towards the altcoin, evident in significant withdrawals from the spot market.
Over the past 5 weeks, or since August 12th, according to data from Coinglass, SOL has experienced a total of $77 million in withdrawals. In the latest week alone, this altcoin witnessed further outflows amounting to $182 million. This trend suggests that investors have been adopting a more cautious stance towards SOL investment during August.
Initially in August, SOL fell from approximately $185 to less than $150 when this text was written, reflecting a risk-averse strategy.
In simple terms, if $340 million worth of tokens are released and sold, it might exacerbate an already fragile investor confidence towards Bitcoin and Solana (SOL). If Bitcoin doesn’t take the lead in market recovery in the next two weeks or fail to boost Solana’s price, there’s a possibility that Solana’s value could decrease as shown on trading charts.
What are the key levels to consider?
On the daily graphs, there was a subdued level of buying activity and demand, as indicated by the declining Chaikin Money Flow (CMF) and Relative Strength Index (RSI), suggesting a weaker market trend.
In the meantime, significant factors for evaluating potential discounts on SOL included the weekly uptrend pattern (OB), which served as a strong support level, along with the price levels of approximately $100 and $128.
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2024-08-17 22:15