Solana Surges 16% After CME Futures Announcement

Solana (SOL) price surged by 16% on March 17, following a significant drop to a 2023 low of $125 on February 28. The rally came after the Chicago Mercantile Exchange (CME) announced the launch of Solana futures, pending regulatory approval from the Commodity Futures Trading Commission (CFTC).

During the preceding week, Solana formed a series of lower lows, culminating in the yearly low on February 28. However, a bullish divergence between price and relative strength index (RSI) emerged during this period. The 4-hour chart illustrated a rally that took place at the back of these bullish divergences, leading to a swing pattern failure on the 1-day chart. This trend reversal indicator suggests potential weakness in the dominant trend and identifies possible reversals.

The relief rally occurred following the RSI entering oversold territory, marking its lowest level since June 2023, when Solana was priced at $15. The immediate overhead resistance remains at $160. Flipping this level into support will further validate $125 as the local bottom. A confirmed close above $143 will validate the bullish swing pattern failure (SFP).

As widely discussed, Solana's token unlocks go live on March 1, with 11.2 million SOL entering the circulating supply. This represents a 2.84% increase in the total market cap, worth $1.62 billion at the moment. The unlock event is largely investor-based, with companies such as Galaxy, Pantera, and Figure looking to secure between $150 million to $3 billion in unrealized gains.

Keyrock Trading, a crypto markets maker platform, predicted the outcome based on analysis data from more than 16,000 token events. The platform highlighted that investor-based unlocks witnessed an average of 5% correction 30 days before the event. In this case, SOL suffered a significant 60% decline over the past month. The platform termed the unlock event as a medium-size (1-5% supply) and stated that historically, medium unlocks see an ~8% decline within 30 days post-unlock.

Based on the data, SOL is expected to witness some form of downward pressure for the short term after March