Solana (SOL) is one of the most successful cryptocurrencies highly funded by venture capitalists (VCs) through private investment rounds. However, its supply is still concentrated in a few whales and institutions, who occasionally dump their holdings on the market.
In particular, the on-chain analyst behind Lookonchain identified an entity that has been constantly selling Solana tokens throughout the year. Consolidated in two addresses, this whale or institution has sold 695,000 SOL worth $99.50 million in 2024.
As Lookonchain reported, these addresses have been selling a weekly average of 19,306 SOL, worth $2.76 million. The whale still has 1.88 million SOL staked in Solana’s protocol for a nominal value of $255.89 million.
Solana (SOL) price analysis
SOL is up 32.15% year-to-date and is currently trading at $133.91, inside a six-month consolidation range. Notably, the current level is at this range’s support, which Solana must hold above to avoid reverting this year’s gains.
As the chart shows, however, the range’s resistance is in a downtrend with subsequent lower highs, suggesting a weak momentum.
Solana (SOL) year-to-date price chart. Source: Finbold
The observed behavior from the aforementioned whale or institution could be both caused by or the cause of this scenario. A constant selling pressure from large holders, summed up to Solana’s already high supply inflation, can directly impact its price.
Unless the demand for SOL increases in the cryptocurrency market, these continued sell-offs have the potential to revert gains. This is a cautionary tale of the importance of understanding a project’s tokenomics and supply pressures before investing.
Solana investors, funding and supply distribution
In this context, Finbold retrieved data from CryptoRank that sheds light on Solana’s initial distribution and funding.
Essentially, most of the initial allocation has already been unlocked from the vesting contracts and is made of liquid holdings. The Foundation initially managed 56.5 % of SOL’s supply for its treasury, team payments, and community strategic allocations.
SOL tokens distribution and allocation. Source: CryptoRank
As for the private investors, 25.6% of the supply was allocated to seed investors and the funding rounds. In total, there were five disclosed fundraising rounds from April 2018 to January 2020 before the Initial Coin Offering (ICO). 20 institutions participated in these rounds, which raised $43.79 million for Solana Labs.
Additionally, an undisclosed funding round raised $314 million in 2021, part of a previously hidden token supply. Overall, SOL raised $334 million in funding rounds and $25.55 million in the public offering.
SOL fundraising – funding rounds and ICO. Source: CryptoRank
In closing, SOL is a token with ongoing selling activities and high-potential dumps that may affect its charts. Solana investors must closely monitor whale and institution activity for insights on SOL’s potential price performance.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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