Solana Price Heading to $5? FTX’s $628M Worth SOL Liquidation Worries!

The post Solana Price Heading to $5? FTX’s $628M Worth SOL Liquidation Worries! appeared first on Coinpedia Fintech News

Solana (SOL), a prominent innovative contract blockchain with a Total Value Locked (TVL) exceeding $300 million, has encountered various challenges following the turmoil surrounding FTX and Alameda Research late last year. It’s worth noting that FTX, backed by Sam Bankman-Fried (SBF), played a significant role in supporting the Solana DeFi network by listing its SPL tokens, which substantially boosted SOL’s trading volume. Consequently, FTX has maintained a crucial stake in the Solana network before and after its bankruptcy filing.

Nonetheless, Solana’s core development team has remained committed to building infrastructure aimed at facilitating mainstream adoption. Notably, the Solana network made headlines by introducing the Saga mobile, the world’s first Web3-focused smartphone.

Why Solana’s Price Might Still Face Challenges

A digital asset analyst, who goes by the pseudonym “Bleeding Crypto,” has shared a bearish perspective on Solana’s price trajectory. Bleeding Crypto believes that SOL’s price could potentially correct towards the support zone ranging between $5 and $8. This pessimistic outlook is rooted in the immense selling pressure that Solana currently faces, mainly due to the need to liquidate over $628 million worth of SOL tokens to repay FTX creditors.

SOL Price Analysis

Another prominent digital asset analyst, known as Crypto Tony, has also expressed a bearish sentiment regarding Solana (SOL). Analyst suggests that the entire altcoin market may experience a near-term capitulation phase, aimed at establishing a more robust foundation.

The tweet suggests watching for a potential bounce at $10 for Solana (SOL) after a double bottom pattern. However, the user anticipates the price could drop to $5 before rebounding, hoping for a sharp capitulation-style wick across the broader altcoin market, indicating a significant price movement.

Why Solana Price is About To Crash?

It’s important to note that the current leadership of FTX, led by CEO John Ray III, has devised a strategy to avoid causing market turmoil. They have proposed a gradual sell-off plan, intending to release up to $100 million worth of coins weekly. This measured approach is designed to mitigate the impact on the market and prevent sudden price crashes.

The Bearish sentiment arises from the news that FTX, a prominent cryptocurrency exchange, is planning to sell off a substantial amount of $SOL tokens worth $628 million worth of SOL tokens to repay FTX creditors. The Analyst implies that this impending sale will likely lead to a significant drop in the SOL price. He believes SOL could soon drop to a much lower price range, specifically between $5 and $8.

Conclusion

Solana’s journey continues to be marked by challenges, including the repayment of FTX creditors and broader market sentiment. While some analysts predict a potential price correction for SOL, the blockchain’s development team remains committed to advancing its infrastructure for broader adoption. As the crypto landscape evolves, it will be essential to monitor how Solana navigates these challenges and adapts to changing market dynamics.