Solana faces selloff fears as FTX-linked wallet unstakes 178,631 SOL tokens

FTX and Alameda Research have unstaked 178,631 SOL tokens from a Solana staking wallet igniting concerns over potential sell-offs that could impact Solana’s price and the broader cryptocurrency ecosystem.

With the ongoing liquidation efforts by FTX, market analysts are closely monitoring the implications of this development for the future of Solana.

Just a normal transfer or potential liquidation?

The FTX/Alameda wallet, known for its active transactions, redeemed the 178,631 SOL tokens on October 12, 2024.

According to data from Solscan, these tokens are expected to be transferred through various wallets before ultimately landing on major exchanges like Coinbase and Binance for potential liquidation.

This move aligns with a consistent pattern observed in FTX’s trading behavior, where significant amounts of Solana tokens are typically transferred around the 12th to 15th of each month.

The wallet still holds 7.09 million SOL tokens, valued at over $1.1 billion, raising fears of further sell-offs.

FTX’s liquidation strategy has been in motion since its collapse in late 2022, with the exchange gradually offloading its crypto assets to repay creditors.

A recent court ruling has enabled FTX to expedite these repayments, with plans to liquidate approximately $100 million in crypto weekly, potentially increasing to $200 million if necessary.

Impact on the price of Solana

The ongoing liquidation of FTX’s assets, particularly its SOL holdings, poses a threat to the stability of Solana’s price.

Since FTX’s collapse, the price of Solana has been highly reactive to changes in FTX/Alameda’s holdings.

In November 2022, the value of SOL plummeted to as low as $8 per token due to the market panic triggered by FTX’s downfall.

Currently, with Solana trading around $152, market watchers are apprehensive about the potential for a dip toward the $121 support level if significant sell-offs occur.

Source: CoinMarketCap

Despite recent positive momentum, where Solana experienced a 20.43% rally, profit-taking and bearish pressure have led to a retracement from a high of $157.8.

The key support level at $150 will be crucial in maintaining upward momentum, as further liquidations could jeopardize this threshold.

As FTX continues to unwind its positions, the implications for Solana extend beyond immediate price fluctuations. The consistent movement of SOL tokens could undermine staking rewards and network security, crucial factors for the overall health of the Solana ecosystem.

With FTX’s plans to liquidate additional assets, the cryptocurrency community remains vigilant, anticipating how these developments will shape Solana’s future.

The post Solana faces selloff fears as FTX-linked wallet unstakes 178,631 SOL tokens appeared first on Invezz