Investors might want to hold off buying SOL after this revelation
Solana’s native cryptocurrency SOL has had an unexpectedly bearish week so far. The considerable discount that it has received so far suggests that now might be a good time to ape back in. However, if you intend to buy disounted SOL at its current level, you might want to reconsider for now and here’s why.
Read Solana’s (SOL) Price Prediction for 2023-2024
Lambda Markets has reported an interesting observation, one which suggests that SOL might be about to experience more pressure. According to the findings, roughly 47.3 million SOL will be unstaked on Thursday. The prevailing assumption is that the unstaked SOL will likely find its way onto exchanges, ushering in a new wave of sell pressure.
New $SOL alert posted in the telegram channel.~$845MM USD worth of solana is due to be unstaked in 21 hours time from now. We assume that this is being unstaked with the intention of selling, sol volatility will be wild today. — Lambda (@lambdamarkets1) November 9, 2022
If the entirety of the unstaked SOL is sold, then we should expect over $890 million worth of sell pressure. This is enough to discourage other SOL holders to offload their SOL holdings in the hopes of buying back at lower prices. In other words, we might see over $1 billion worth of sell pressure flowing into exchanges.
Will SOL bulls be suppressed?
Solana’s market cap dropped by as much as $7.7 billion in a matter of just 7 days. The SOL expected to be unstaked in the next 24 hours represents a small fraction of the sell pressure we saw this week.
Nevertheless, the incoming sell pressure will have to outweigh demand at its present lows. Interestingly, SOL’s market cap revealed that there was over $1.2 billion worth of buying pressure in the last few hours, at press time.
As expected, the sharp market cap drop resulted in an equally sharp decline in SOL’s value.
It was trading at $18.57 at press time – a new 2022 low. The expectations of a bullish recovery are based on the fact that it is now in oversold territory.
Solana’s volume soared to its highest weekly and monthly level in the last 24 hours too. However, it did register a slight dip before achieving its current highs.
The dip might represent the slowing down of sell pressure and the return of bullish volume traders buying the dip. This might explain why SOL’s price hovered within the $18 price range.
SOL’s social dominance also registered significant upside over the same time period. This means Solana is now receiving a lot of attention and investors might be extra sensitive to positive or negative news.Source