Solana Price Drops: Reasons and Analysis
In the past 24 hours, the price of Solana (SOL) has dropped by 10%, down to $164.2 on Monday morning in Europe. Over the past week, SOL has lost 19% of its value. So, what is behind this drop?
Impact of FTX Debt Repayment
Cryptocurrency exchange FTX, which went bankrupt in 2022, began the process of repaying creditors on February 18, 2025. The first repayment focuses on creditors with claims under $50,000, totaling around $1.2 billion. Notably, around 11.2 million SOL tokens, worth around $2.06 billion, will be unlocked on March 1, 2025. This increase in liquidity could put significant downward pressure on the price of SOL.
Reaction from Major Investors
Institutional investors such as Galaxy Digital and Pantera Capital have acquired large amounts of SOL from FTX. Galaxy Digital purchased SOL at $64 per token, while Pantera Capital purchased it at around $95 per token. If these investors decide to sell large amounts of SOL, the price could be severely affected due to insufficient market liquidity to absorb it.
On-chain metrics and market sentiment
The number of active addresses on the Solana network hit a five-month low on February 15, with over 8.3 million users. Although this number has increased to 10 million, the price of SOL has continued to decline, indicating selling pressure and negative market sentiment. Solana's total transfer volume has also dropped sharply from $2 billion in mid-November to just $23 million today.
Conclusion
Solana’s price decline reflects broader market concerns, particularly regarding the upcoming token unlock and selling pressure from large investors. For SOL’s price to recover, it will require improved market sentiment, increased on-chain activity, and stability from external factors such as FTX’s debt repayment.