Analysis on the impact of SOL unlocking on the market Recently, there has been much discussion in the market regarding the unlocking of SOL (Solana) tokens, especially concerning the potential impacts on the market.

The following analysis is conducted from both sentiment and market behavior dimensions to more clearly assess the potential impacts of unlocking.

I. The Impact of Sentiment

1. Scale and timing of unlocking

On March 1, a large-scale SOL unlocking is expected, but it should be noted that the unlocking is not completed at once; rather, it is being gradually released linearly starting from February. This staggered unlocking approach alleviates market concerns about concentrated sell-offs to some extent.

2. Cost analysis of stakes

According to data, the average cost of SOL being unlocked this time is about $70. Among them, Galaxy Digital's holding cost is $64, while the average cost for other institutions is $94. It is noteworthy that Galaxy Digital holds two-thirds of the total unlocking amount this time, which means its holding cost is lower and may have a certain impact on market selling pressure.

3. Pressure from sentiment

Although the scale of unlocking is large (approximately 35% of the circulating supply), market sentiment often amplifies short-term volatility. Investors are concerned about potential sell-offs after unlocking, and this sentiment may lead to increased price volatility in the short term.

II. Market Behavior Analysis

1. The possibility of institutional sell-offs From a rational perspective, institutional investors are unlikely to choose to sell SOL in a concentrated manner in the open market.

Reasons are as follows:

- Loss Risk: If institutions choose to sell off large amounts in the open market, it could significantly lower prices, even below their holding costs, leading to losses.

- Possibility of OTC trading: Institutions are more inclined to sell tokens through over-the-counter (OTC) transactions to avoid directly impacting market prices. For example, MicroStrategy ($MSTR) also used OTC methods when purchasing Bitcoin to reduce market volatility.

2. Observation of market performance

The recent decline in SOL prices is mainly concentrated in the Asian trading hours, while after entering the US trading hours, prices tend to stabilize or even show signs of stopping the decline. This indicates that emotional trading in the Asian market may be the primary reason for short-term volatility, while the behavior of institutional investors in the US market is relatively rational.

3. The possibility of long-term holding Institutional investors typically aim for maximum returns rather than short-term cashing out. Considering that the proportion of unlocked SOL is larger (about 65%), institutions are more likely to choose long-term holding or staggered selling to maximize returns and reduce market impact.

III. Conclusion

1. The impact of sentiment cannot be ignored

The unlocking events do have a short-term impact on market sentiment, especially during the Asian trading hours, which may lead to increased price volatility. 2. The possibility of large-scale sell-offs is relatively low

From the perspective of institutional behavior and market logic, the likelihood of concentrated sell-offs is low. Institutions are more likely to handle the unlocked tokens through OTC transactions or staggered selling to reduce direct impacts on the market.

3. Long-term impact is limited

The unlocking events have limited long-term impact on the market, especially in the context of rational operations by institutional investors. The market will ultimately revert to fundamentals, and the price trend of SOL will depend more on its ecological development and the overall market environment.

In summary, although unlocking events may trigger market volatility in the short term, from the perspective of institutional behavior and market logic, the likelihood of large-scale sell-offs is low. Investors should rationally view short-term fluctuations and focus on long-term value.