Solana (SOL) whale creates selling pressure after sending unlocked tokens to exchanges

On April 4, a whale address received one of the biggest single Solana (SOL) unlocks in the upcoming schedule. The unlocking of 379,700 SOL is creating additional selling pressure. 

A whale received 379,700 SOL, one of the biggest daily unlocks until 2028. Just hours after the SOL came out of a staking account, most of it was sent to Kraken, Coinbase, or other addresses. The whale’s wallet retains a balance of only 644.82 SOL, after holding for over two years. The whale’s wallet first received funding from an OpenSea NFT investor wallet, acquired just as SOL was coming out of its bear market.

The whale could liquidate the holdings for a value of $44.47M, as SOL traded around $116.07. The whale selling coincides with a general downturn of the entire crypto market, as the Solana ecosystem seeks to retain its activity levels. The whale’s stake is the largest among all April 4 unlocks, which contain other large-scale staking entities. 

The market had to absorb 11.2M SOL in March, coming from the early wallets of FTX. The vested tokens were also used for staking, accruing additional rewards. The Solana chain retains an inflation rate of 4.62%, though sudden unlocks can cause additional selling pressure. For now, the SOL market absorbs the regular daily unlocks, which will continue with linear unlocks until 2030. 

The larger unlock precedes a series of additional inflows coming in April and May, mostly tied to the Alameda and FTX post-bankruptcy release of SOL. April as a whole has more planned unlocks, for a total of over 2.7M SOL to be freed for trading, followed by months of extremely slow supply growth. The latest unlocks increased the circulating SOL to over 514M tokens.

In total, the Solana market will have to absorb an additional $7.5B in three months before ending the highly active series of unlocks.

More whales liquidate their unlocked SOL

On-chain data showed three additional large-scale sellers liquidated their SOL balance. One of the whales liquidated $9.47M in SOL, retaining a stake of 78,469 SOL. The next whale sold $3.53M worth of SOL, while retaining another 68,000 SOL in staking. The last whale sold 25,501 SOL estimated at $3M, and has no remaining SOL in staking. 

In total, Solana will distribute $200M worth of tokens to other whales and small holders, and selling may be unpredictable. For now, whales have shown they are ready to at least take some profits, in case SOL prices remain depressed. 

Despite the recent price drop, the four significant whales deposited SOL for staking in 2021, and have achieved on average 5.5X growth from their initial investment, based on Arkham Intelligence data. 

Not all whales from the same staking cohort have moved their tokens, with more SOL still sitting idle in stake accounts. However, the whales would have the right to move and allocate SOL, or sell the tokens on the open market. 

Can SOL rally after the latest unlock?

For SOL, the latest inflows were the last cliff unlock for the years ahead, leaving the market with less tokens to absorb through linear inflows. SOL will still be in demand as a liquidity asset on DEX and for lending. 

Based on Santiment analysis, the Solana ecosystem is regaining attention and SOL is expected to stage a recovery. SOL is not yet in the oversold territory, but is getting closer to other oversold assets. 

SOL open interest grew in the past day, from $2B to over $2.2B. Short positions have fallen to 21%, opening the door to potential long liquidations. For SOL, retail and crowd sentiment is slightly more bearish, while smart money is more bullish.

Bearish predictions see SOL dip as low as $90 if selling from whales continues. Large-scale holders are also sending their SOL to exchanges outside the unlock schedule, as overall crypto activity has slowed down.

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