- Solana is set to record its single largest one-day unlock in the market.
- Market sentiment has turned bearish, showing a tendency for SOL to fall back to $100.
Solana’s [SOL] performance in the market has been very bearish, with the asset losing a notable 17.79% in the past month, dampening its rally trajectory.
In the past 24 hours, the decline has continued, with a loss of 1.69% during this period.
Market sentiment doesn’t appear to favor a potential push upward for SOL, particularly with a $200 million token unlock set to happen and the asset losing a key support level on the chart.
Potential impact of massive token unlock
Recent market analysis by Arkham Intelligence shows that a massive token unlock is set to happen on April 4.
According to the details of the unlock, four whales—addresses that control between 0.1% to 1% of the token supply—who each staked $37.7 million worth of SOL in April 2021, are set to unlock their tokens, gaining just 5.5x.
Source: Arkham Intelligence
The current valuation of this unlock stands at $200 million. If this happens, the supply of SOL in the market could increase, which would push the asset lower if there is no sufficient demand to absorb the supply.
Currently, market sentiment has been notably bearish, implying that the potential for a market buyback is weak and SOL could plunge further.
Buyback potential remains weak
The potential for demand in the market remains low, as key indicators tracking market participants’ activity have been on the decline.
Press-time data reveals there has been a significant drop in daily transactions over the past 24 hours. The count has declined from a high of 91.4 million on the 1st of April to 72.9 million at the time of writing.
A sharp decline like this implies that sentiment has turned negative, and these addresses have likely sold their SOL, causing the transaction count to drop.
Source: Artemis
This bearish market narrative has been evident, given the divergence between decentralized exchange trading volume and price decline over the past week.
While price dropped by 13% in the past week, SOL’s trading volume rose from $1.3 billion to $1.76 billion—a $460 million increase.
When there’s a divergence between price and volume—price drops while volume rises—it implies that the selling pressure on the asset, in this case SOL, is high and backed by solid momentum.
Where next for SOL?
Selling pressure on SOL could force it to plunge further, as it loses a key support level on the chart at $128—a level that previously acted as a catalyst for SOL reaching its all-time high of approximately $295.
Source: TradingView
According to AMBCrypto’s analysis of price action, the next likely move is for the asset to decline to the support level at $100.34.
Heightened selling pressure could drive the asset further down to the next potential support at $85.
