The crypto market has faced significant upheaval this February, suffering losses exceeding $325 billion since the beginning of the month. Rapid sell-offs and liquidations have rattled investors, leading to heightened concerns about the stability of various cryptocurrencies.
According to data from The Kobeissi Letter, nearly half of this staggering loss occurred within just 24 hours, with around $150 billion wiped out as trading volumes surged. The most dramatic drops have been observed across nearly all crypto assets, particularly Solana (SOL) and Ethereum (ETH). The market sentiment hit rocks after Solana experienced a catastrophic plunge, dropping 22% since Friday, which analysts say stemmed from the broader cooling of memecoin enthusiasm.
Bitcoin (BTC) has also struggled, breaking below the key support level of $90,000. This decline intensified bearish market sentiment and was aggravated by the broader pullback of the S&P 500, which signaled challenges even for the leading cryptocurrency.
The hack on the Bybit exchange, now registered as the second-largest hack in crypto history, contributed to the unease. On February 21, it was reported by several sources, including Coinmarketcap, which noted how Bybit lost over 400,000 ETH from its cold wallet. Following this incident, Ethereum, already under pressure, dropped from around $2,740 to as low as $2,408—marking almost a 12% decline.
Despite these challenges, analysts from The Kobeissi Letter expressed cautious optimism, emphasizing, “We have seen countless -10% pullbacks in Bitcoin over the course of this bull run. Technical pullbacks are healthy.” They also warned, though, about the potential sustained pressure on prices due to reduced liquidity and risk appetite.
Another significant concern for Solana holders arises from the upcoming unlocking of approximately 11.16 million SOL tokens, valued at around $1.79 billion, set to occur on March 1 as part of the FTX bankruptcy proceedings. This expected influx of supply has many investors worried about heavy selling, which could push SOL prices down even more.
Recent data indicated heavy liquidations across crypto markets, amounting to about $882 million. This rising liquidation statistic has only exacerbated bearish sentiment, causing panic among investors holding Solana. The SOL price, which had struggled to stay above $150, has now swung down to around $140, its lowest value since October 12, 2024. The SOL token experienced another 15% decline overnight, adding to the anxiety about its future.
The fear is palpable: with the impending token release, some analysts state, Solana could potentially fall back to the $100 psychological support if market conditions worsen. The sentiment is reflected not only in numeric trends but also through notable transactions as whale accounts—those holding large quantities of SOL—have markedly decreased from 5,167 to 5,032 addresses. The activity on the Solana network has also dwindled, with active addresses dropping significantly. At present, 3.49 million active addresses remain on the network—another worrying sign.
Compounding these issues, Solana's reputation has been marred by various security breaches, including the aforementioned Bybit hack linked to earlier scams within the Solana ecosystem. Such incidents have created distrust among potential investors and contributed to decreased market participation.
The broader cryptocurrency market is not without its struggles either. Bitcoin saw significant losses of around 7%, now trading at $89,347, and Ethereum dropped by approximately 9% as it currently sits at $2,490. Price corrections are common, but the volatility means altcoins like Solana tend to suffer more severe downturns during such corrections.
The immediate future for Solana remains uncertain. If current selling pressure continues, there is potential for SOL to slide even lower, possibly reaching about $110. On the other hand, if it can stabilize and regain support at $177, analysts could see it recover toward $215. For the time being, the upcoming March 1 token release will be the focal point for traders and analysts alike, as it might largely determine the fate of Solana and the broader crypto market.