Solana’s price has been struggling recently, with significant declines and resistance at key levels. According to cryptocurrency analyst Chris Burniske, this underperformance is largely due to a token unlock event set for March 1, 2025. During this event, 112 million SOL tokens, worth approximately $263 billion and making up 23% of the total supply, will enter circulation.
Market Psychology and Technical Analysis
Token unlocks are pivotal moments in crypto markets, often triggering concerns about oversupply and selling pressure. These fears can lead to investors adjusting their positions ahead of time. Burniske suggests that market participants may have already priced in the upcoming unlock, which likely contributed to Solana’s recent downtrend.
On the technical side, Solana is currently trading within a bearish descending triangle, a chart pattern that typically signals continued downward movement. The price is hovering near the 26-day exponential moving average (EMA) at $215 and has struggled to break through the descending trendline.
Key Levels and Volume Trends
If buyers fail to defend the $215 level, Solana could face further declines, potentially heading toward the 200-day EMA around $194 or the $172 support zone. Additionally, decreasing trading volume suggests that market participation is waning, with many investors taking a cautious stance ahead of the unlock.
Large token unlocks often trigger price corrections, as investors sell off newly unlocked tokens. This pattern seems to be playing out with Solana, as preemptive selling activity builds ahead of the March event.
Long-Term Outlook
Despite the short-term bearish sentiment, Burniske remains optimistic about Solana’s long-term prospects. The blockchain’s strong ecosystem and growing user base could help cushion the impact of the token unlock. If SOL can break through the descending trendline near $225 and regain upward momentum, a recovery could be on the horizon.
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