SOL Correction Deepens, But Whale Activity Hints at a Recovery

In February’s second half, the crypto market remained under pressure as top assets like Solana were bracing for impact ahead of a significant token unlock.

Cryptocurrency market remained under pressure during the second half of February with top assets like Solana (SOL) bracing for impact ahead of a significant token unlock.

While Bitcoin and Ethereum maintained a consolidation trend, adding to broader market uncertainty and limiting recovery potential in altcoin, a recent surge in whale accumulation offered an opportunity for SOL to bottom its correction and rebound.

As highlighted by Footprint Analytics, Solana price fell from a high of $295 to its current trading price of $170, registering a loss of 42% over the past months.

While broader market uncertainty initiated this downfall, recent events, including the memecoin controversy of LIBRA and the upcoming token unlock of 11.2 million SOL tokens on March 1, maintained the bearish momentum.

Furthermore, hedging flows tied to FTX-related SOL are signaling potential supply pressure that could prolong Solana price correction.

However, Footprint Analytics noted a massive withdrawal from Binance by Solana whales, offering a contrasting perspective.

According to blockchain analysis platform Lookonchain, the transaction details showed that the wallet “AA21…VxH9” withdrew 123,500 SOL, which is about $20.8 million, in multiple transactions earlier today.

Meanwhile, a newly created wallet withdrew 87,328 SOL ($14.8M) from Binance over two days. According to blockchain data, the wallet immediately staked the entire amount, reinforcing the bullish sentiment around Solana’s staking yield.

This accumulation, amid a significant downfall, indicates that large investors are interested in SOL’s discounted value with their expectation for a renewed recovery trend.

After forming a double top pattern on the daily chart, Solana price displayed a strong breakout from the $175.5 support on February 18th.

This chart setup typically displays an ‘M’ shape reversal and prompts a major market downturn.

A potential negative crossover between the 20-and-100-day EMA slope also hinted at escaping bearish sentiment among traders. If the pattern holds true, the SOL price could plunge 40% from the current trading price, hitting a low of $92.

However, on the contrary, a 0.74% surge in Solana price today showed a lack of follow-up on the downside. Amid whale accumulation, if the coin price rebounds above $175 in the coming days, the previous breakdown could be marked as failed.

This potential bear trap could result in substantial short liquidation and drive buying pressure up.