Solana (SOL) has dropped below the $160 mark for the first time since October 2024, marking a significant downturn in market sentiment and triggering widespread concern among traders and long-term investors. The price of SOL fell to $158.46 on February 24, 2025 — a 7% decline in just 24 hours — and has remained in the $159 range, showing little sign of recovery. This drop represents a 35% monthly decline and the lowest price level in over four months.
Market Volatility Driven by Upcoming $1.77 Billion Token Unlock
A major catalyst behind the bearish momentum is the looming unlock of 11.2 million SOL tokens, valued at approximately $1.77 billion, scheduled for March 1, 2025. These tokens originate from the FTX bankruptcy auction, where institutional buyers acquired large quantities of SOL during asset liquidations.
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This event has introduced significant uncertainty into the market. If early recipients decide to offload their holdings immediately after unlocking, the resulting sell pressure could further depress prices. Historically, large token unlocks have led to sharp corrections, especially when they coincide with weakening market conditions.
Technical Indicators Signal Bearish Momentum
Technical analysis reveals a deteriorating structure in Solana’s price chart. According to on-chain analysts like Crypto_McKenna, SOL has lost critical support in the $167–$169 zone, a level that previously acted as a strong floor during prior pullbacks. With this support now broken, technical models suggest potential downside targets between $112 and $126.
Current price action shows weak buying interest, indicating that bulls are hesitant to step in at current levels. The Relative Strength Index (RSI) on the daily chart is approaching oversold territory but has yet to generate a clear reversal signal, suggesting further downside remains possible before any meaningful recovery.
Liquidation Risks Mount Below $160
The recent dip to $160 triggered **$21 million in long liquidations, according to derivatives data platforms. More concerning is the concentration of open long positions between $120 and $160**, creating a high-risk zone for cascading liquidations if selling pressure intensifies.
These liquidation clusters act as fuel for extended downtrends, as automated margin calls force exchanges to sell positions at market prices — often accelerating declines during volatile periods.
Declining On-Chain Activity Adds to Concerns
Beyond price movements, key network metrics reflect weakening activity across Solana’s decentralized finance (DeFi) ecosystem:
- DEX volume down 36.7% week-over-week, now totaling $16.6 billion for the week
- Daily DEX volume stabilizes at $1.5 billion, signaling reduced trading interest
- Overall user engagement has cooled following a surge in meme coin speculation earlier in Q1 2025
DeFi Llama data confirms that while Solana remains one of the most active Layer 1 blockchains, its momentum has stalled amid broader crypto market consolidation.
PumpFun Tests New AMM Pools — Could It Revive Activity?
Amid the downturn, a potential catalyst for renewed network usage is emerging from PumpFun, a popular meme coin launchpad built on Solana. The platform is currently testing its own Automated Market Maker (AMM) liquidity pools through a beta swap interface.
This development allows users to trade SOL directly against newly launched meme coins without relying solely on established DEXs like Raydium or Orca. By controlling its own liquidity infrastructure, PumpFun aims to reduce slippage, speed up trades, and capture more fees — potentially increasing revenue and user retention.
Historically, PumpFun has driven spikes in transaction volume and wallet activity during meme coin booms. If its new AMM system gains traction, it could reinvigorate short-term demand for SOL, especially among retail traders chasing early-stage tokens.
However, the impact on SOL’s price remains speculative. While increased network usage is positive, it may not be enough to counterbalance macro-level selling pressure from the FTX-related token unlock.
Options Market Reflects Defensive Investor Behavior
Options trading data paints a cautious picture of institutional sentiment. According to Amberdata, nearly 25% of all Solana options activity last week occurred via block trades on Deribit, totaling $32.39 million out of $130.74 million in total volume.
More notably, close to 80% of these block trades were put options, which are typically used as hedges against downside risk or outright bearish bets. This skew toward puts suggests that large traders are bracing for continued volatility or further declines post-unlock.
Such defensive positioning often precedes periods of heightened market stress and can influence spot market behavior as traders adjust their exposures.
Market Sentiment Weighed Down by Security Incidents
Adding to negative sentiment are reports linking Solana-based meme coins to illicit activity. A hacker linked to the Bybit breach has reportedly used Solana’s fast and low-cost transactions to launder stolen funds through obscure token swaps.
While Solana itself was not compromised, its association with high-risk assets and rapid transaction finality makes it an attractive vector for such operations. Regulatory scrutiny around these incidents could further dampen institutional adoption in the near term.
Core Keywords & SEO Integration
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Solana price, SOL price prediction, Solana token unlock, Solana DEX volume, PumpFun AMM, SOL liquidation, FTX auction SOL, and Solana market analysis.
These terms align with current search trends and reflect what traders and investors are actively querying online — from technical forecasts to macro-level risk factors affecting SOL’s valuation.
Frequently Asked Questions (FAQ)
Q: Why did Solana drop below $160?
A: SOL fell below $160 due to a combination of factors: weakening technical support, an impending $1.77B token unlock from the FTX bankruptcy auction, declining DEX volume, and rising put option activity signaling bearish sentiment.
Q: What happens on March 1, 2025, with Solana?
A: On March 1, 2025, approximately 11.2 million SOL tokens (~$1.77B) will be unlocked from the FTX bankruptcy estate. Recipients from the auction may choose to sell, hold, or stake these tokens, influencing short-term price action.
Q: How does PumpFun’s new AMM affect Solana?
A: PumpFun’s self-built AMM could increase meme coin trading efficiency on Solana, reduce reliance on external DEXs, and boost transaction volume. If widely adopted, it may support network activity even during broader market dips.
Q: Is Solana still a good investment?
A: While short-term risks are elevated due to token unlocks and weak momentum, Solana’s strong developer activity, fast transaction speeds, and growing DeFi/NFT ecosystems maintain its long-term appeal for many investors.
Q: Where are key Solana liquidation zones?
A: Major long liquidation clusters are concentrated between $120 and $160. A breakdown below $160 increases the risk of cascading liquidations that could accelerate selling pressure.
Q: How much did Solana drop in the past month?
A: Over the past 30 days, Solana has declined by approximately 35%, falling from above $240 to around $159 — its lowest level since October 2024.
As Solana navigates this challenging phase, all eyes will be on March 1 and the actions of major token holders. While short-term pressure remains intense, network fundamentals and innovation continue to evolve — offering cautious optimism for recovery once uncertainty clears.