SOL ETF

Solana

LIBRA

Trouble in Paradise is an apt idiom to describe the current Solana <a href="https://cointelegraph.com/solana-price-index" rel="noopener noreferrer nofollow" target="_self">(SOL) </a>ecosystem. The vastly popular L1 token has attracted bad publicity due to the recent <a href="https://cointelegraph.com/news/libra-token-insider-trading-javier-milei-scandal" rel="noopener noreferrer nofollow" target="_self">LIBRA memecoin fiasco</a>, which included the president of Argentina, insider trading, and over $4.3 billion wiped out in less than 24 hours.&nbsp;
While rival communities were taking shots at Solana recent woes, a massive SOL token unlock event has provided more fuel to the fire, which could potentially add to the selling pressure for the sixth-largest cryptocurrency.&nbsp;
<h2 id="buying-solana-is-dangerous">Buying Solana is “dangerous”&nbsp;&nbsp;</h2>
Last month, artchick.eth, an anonymous crypto commentator, <a href="https://x.com/digitalartchick/status/1882827926280012048" rel="noopener noreferrer nofollow" target="null">outlined</a> Solana’s token unlock schedule for 2025. While Solana has a current token inflation rate of 4.715%, over the next three months (Feb-Mar-Apr), over 15 million SOL tokens worth over $7 billion will enter the circulating supply.&nbsp;
<figure>
 <img alt="$2B Solana unlock incoming — Is it time to hold, short or sell SOL?" src="https://s3.cointelegraph.com/uploads/2025-02/01951498-f62e-7078-865d-d3cad64b776e" title="">
 <figcaption style="text-align: center;">
 Solana token unlocks schedule in 2025. Source: X.com
 </figcaption>
</figure>
The analyst said,&nbsp;
<blockquote>
 “The majority of this SOL was purchased from FTX auctions at $64 by Galaxy, still a very healthy profit. By the time this SOL unlocks, another ~$1B of SOL will be produced via inflation and likely dumped as well.”
</blockquote>
Similarly, RunnerXBT, a crypto trader, <a href="https://x.com/RunnerXBT/status/1891400277535703389" rel="noopener noreferrer nofollow" target="null">mentioned </a>that it was a “dangerous” period to buy Solana. Speaking on the same unlock event, the trader highlighted that companies like Galaxy, Pantera and Figure are in line to extract $3 billion, $1 billion and $150 million in unrealized gains once SOL unlocks occur.&nbsp;
The inference is that most of these companies are likely to sell their allocations, as there is little incentive to hold SOL amid a worsening market sentiment, exaggerated by the recent LIBRA memecoin incident.
In light of that, Kelly Greer, managing director at Galaxy, <a href="https://x.com/kellyjgreer/status/1891143277354639837" rel="noopener noreferrer nofollow" target="null">tried</a> to dismiss the current FUD surrounding the unlocks. Greer pointed out that the upcoming unlock is only 2.31% of the total supply and market cap, with Solana registering $3.6 billion in 24-hour spot volumes. The implication is that the market would probably absorb the selling pressure going into the unlock.
Consequently, Deftsuo, a technical analyst, also believed that the SOL FUD is “hitting a peak.” The analyst <a href="https://x.com/deftsuolol/status/1891369724446994898" rel="noopener noreferrer nofollow" target="null">said</a>:&nbsp;
<blockquote>
 “Max fud is aligning all at once. It’s a fade IMO. Firedancer upgrade and a SOL ETF (with staking likely integrated) coming in 2025-2026. “
</blockquote>
<a href="https://cointelegraph.com/news/libra-token-insider-trading-javier-milei-scandal" rel="noopener noreferrer nofollow" target="_blank">Related: Milei-endorsed Libra token was ‘open secret’ in memecoin circles — Jupiter</a>
<h2 id="is-shorting-solana-the-obvious-trade">Is shorting Solana the obvious trade?</h2>
A clear directional bias for SOL is unclear at the moment, but futures traders were currently shorting Solana. Reetika, a crypto trader, <a href="https://x.com/ReetikaTrades/status/1891355317167911329" rel="noopener noreferrer nofollow" target="null">pointed</a> out that short sellers were “aggressive” over the past 24 hours, with aggregated open interest and funding rates undergoing a divergence. With the current OI rising and funding rates <a href="https://x.com/TylerDurden/status/1891330545327525931" rel="noopener noreferrer nofollow" target="null">becoming negative</a>, the current short-long ratio is 4:1, according to an anonymous trader, Tyler.&nbsp;
<figure>
 <img alt="$2B Solana unlock incoming — Is it time to hold, short or sell SOL?" src="https://s3.cointelegraph.com/uploads/2025-02/01951495-32b6-73ba-a050-e9aaf8bda227" title="">
 <figcaption style="text-align: center;">
 SOL/USDT price at Binance. Source: X / Tyler
 </figcaption>
</figure>
HORSE, a former prop-firm trader, also <a href="https://x.com/TheFlowHorse/status/1891479748074733933" rel="noopener noreferrer nofollow" target="null">pointed</a> out that this was the most significant OI increase for SOL over a short period. The trader also highlighted that most of the OI was added after the altcoin lost the $190 level.&nbsp;
<figure>
 <img alt="$2B Solana unlock incoming — Is it time to hold, short or sell SOL?" src="https://s3.cointelegraph.com/uploads/2025-02/019514a4-7c06-7569-83a4-c61365ef00a8" title="">
 <figcaption style="text-align: center;">
 Solana’s 1-day chart. Source: Cointelegraph/TradingView
 </figcaption>
</figure>
From a technical perspective, Solana’s daily chart looks like it has priced in, at least a part of the upcoming unlock. The event has been public knowledge for a while, with many analysts discussing its potential effect, with prices dropping 30% over the past month. Yet, losing $180 support could exacerbate selling pressure and push prices down to the order block between $168-$155, formed in November 2024.
Another key trend reversal in the works could be the 200-day EMA bearish flip. If Solana is unable to close above $190 on Feb. 17, it will close below the key indicator for the first time since Oct. 10, 2024. This could potentially mark the beginning of a sharp drop-off for the altcoin over the coming weeks.
Related: Why is Solana (SOL) price down today?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

$2B Solana unlock incoming — Is it time to hold, short or sell SOL?

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