Reasons for the decline of SOL:
Big players flash, funds flee
Recently, there has been significant movement of large funds on the Solana chain, attracting market attention. A newly created wallet withdrew a large amount of SOL tokens from the exchange in a short time and quickly staked them, suspected of engaging in short-term arbitrage operations. Additionally, a large holder who has a history of multiple unstaking and selling actions has become active again, exacerbating market concerns about potential selling pressure.
Binance chain steals the spotlight, ecosystem attracts funds
The Binance chain has been active recently, and its pause and resumption of SOL withdrawals has sparked discussions about cross-chain liquidity. The continuous emergence of new projects on the BNB Chain has attracted a significant amount of funds to shift from Solana, leading to a certain impact on SOL's liquidity and significantly increasing competitive pressure.
Unlocking wave is coming, selling pressure warning
March will see a large-scale unlocking of SOL tokens, with an estimated over one hundred million dollars entering the market. This event could trigger premature selling, impacting market liquidity. Considering the impact of the ETF approval storm in January on SOL prices, coupled with the upcoming unlocking wave and regulatory risks, the market outlook is not optimistic.
Market reaction and risk warning
In the short term, SOL prices are struggling at a key point, and if they break below a certain support level, it could trigger a wave of selling frenzy. Although Solana's technology is strong, funds are fleeing, competitors are pressing, and investor confidence is somewhat shaken.
SOL attracted a large amount of funds from ETH, but now the funds are flowing back, and I hold an optimistic view on this phenomenon. It is still early February, and ETH's upgrade is scheduled for April 8, which means the next two weeks are the last opportunity to buy into ETH.
