On March 1, 11.2 million SOL from FTX's bankruptcy auction will be unlocked, worth $2.06 billion. The number of unlocked tokens accounts for about 2.29% of the current SOL circulation supply.

With such a huge selling pressure and the sluggish market, the price of SOL is quite sluggish. Since January this year, when Trump's TRUMP concept coin triggered a market frenzy, SOL hit a record high of $295, and then fell all the way. The weekly line has fallen for four years, with the lowest price dropping to around $160. Is it Solana's turn to be FUDed?

Potential impact of selling pressure

11.2 million SOLs are equivalent to 2.29% of Solana's current circulating supply (about 488 million), worth more than $2 billion. For an asset with a daily trading volume of usually between $1 billion and $2 billion, this influx of unlocked tokens could undoubtedly cause market turmoil. If these tokens are sold quickly, the oversupply in the short term could depress the price of SOL, triggering panic selling by investors, thereby exacerbating the downward trend.

The extent of market impact depends on the behavior of holders after the unlock. Most buyers of these tokens are experienced institutional investors who purchased them at low prices during the auction, and their current paper profits are quite substantial. If they choose to cash out immediately after the unlock, the selling pressure will significantly increase. However, from another perspective, these institutions have held their assets for months or even years during the lock-up period, indicating a certain willingness for long-term investment. Matt Maximo, an investor at VanEck, revealed that some buyers he knows have explicitly stated their goal is to pursue higher returns rather than short-term arbitrage.

In addition, SOL's recent price performance has also provided some clues about market sentiment. Since the bankruptcy of FTX, the price of SOL has surged from a low of $22 to over $170, an increase of more than 700%. Despite a recent market pullback, the overall trend still shows strong support.

What is the likelihood of market panic?

Whether selling pressure will trigger market panic largely depends on investors' psychological expectations and the market environment. Some users have expressed concerns about this unlock, believing that the $2 billion selling pressure could break through the trend line, leading to further price declines. However, there are also viewpoints that the 2.2% increase in circulating supply is relatively limited, and most SOL has already been traded multiple times in the market, meaning the actual impact may be exaggerated.

Historically, large-scale unlock events do not always lead to market crashes. For example, when FTX was approved to sell $100 million worth of cryptocurrency weekly in 2023, the market did not experience a significant drop, but rather gradually absorbed the selling pressure. On January 7, 2021, SOL unlocked 362 million tokens, accounting for 55.7% of the maximum supply. At that time, the token price was around $3, reaching a historical high of $259 in November 2021.

Generally speaking, the negative effects of unlocking tend to ferment one month before the official unlock, and after the unlock is completed, the bearish sentiment may have already been fully priced in, potentially even leading to a rebound at certain times. Taking ONDO as an example, there was a massive unlock in mid-January this year. After reaching a peak in December 2024, it fell continuously, but after the official completion of the unlock, there was no so-called panic selling or other market behaviors; instead, the token price fluctuated within a certain range. This time, although the scale of SOL's unlock is larger, the institutional nature of the participants and substantial profits may weaken selling motivation.

The unlocking of SOL worth over $2 billion on March 1 will undoubtedly exert some selling pressure on the market, but the likelihood of triggering widespread panic is relatively low. Rational decision-making by institutional investors, the market's absorption capacity, and the resilience of the Solana ecosystem will be key factors in buffering this shock.

For us, paying attention to the price trends and changes in trading volume after the unlock, while formulating strategies based on our own risk tolerance, will be the best way to respond to this event.