After a significant dip to $51.27, Solana (SOL) is currently witnessing a notable recovery in its market price, currently trading at $55.31 (up 7%). This upswing follows a period of intense volatility, with SOL reaching a peak of $63.80 last Saturday, marking an impressive 270% rally over 61 days, only to drop almost 20% subsequently.
The FTX Factor In The Solana Price Movement
FTX has probably been a significant influence on SOL’s price volatility. A report from Lookonchain, an on-chain analysis service, indicates that FTX’s liquidity in SOL has drastically diminished, with Solana worth only $185,000 remaining in their public addresses. “FTX deposited 250,000 SOL ($13.6 M) to Kraken 7 hours ago. Currently, FTX’s public addresses on Solana only have 3,408 SOL,” Lookonchain reported.
FTX deposited 250K $SOL($13.6M) to #Kraken 7 hours ago.
Currently, FTX’s public addresses on #Solana only have 3,408 $SOL ($185K) left.https://t.co/A4CyCXgVzS pic.twitter.com/4EVtrwoYyX
— Lookonchain (@lookonchain) November 14, 2023
Crypto influencer MartyParty commented on the situation, criticizing FTX’s strategy of liquidating SOL holdings for creditor payments as “one of the most idiotic moves in crypto history.” According to his observations, FTX’s liquid SOL has been entirely offloaded to the market, marking an end to its influence on SOL’s price dynamics.
Meanwhile, crypto analyst Bluntz pointed out that despite FTX’s consistent selling of SOL, ranging from 250,000 to 700,000 daily for the past three weeks, the price of SOL managed to stay resilient. He suggests that with the depletion of FTX’s unlocked tokens, a significant price surge for SOL could be imminent, “Once this seller is gone, I can only imagine how hard it’s gonna pump. Dont middle curve this.”
The Remaining SOL Holdings Of FTX
While FTX has sold 6.996 million SOL in the last few weeks, they are still sitting on a huge pile of Solana. Crypto Edgar provided an overview of FTX’s SOL holdings, highlighting that while the bulk of SOL transfers from FTX’s cold wallets have been completed, a substantial amount remains staked in various liquid stake solutions, potentially available for future sale.
“The FTX cold wallets contain almost no more SOL but they still hold some amount of liquid SOL which is staked in liquid stake solutions Lido Finance, Marinade Finance and JPool. In total 1.25 million SOL is still locked but could easily be withdrawn and sold as well,” the analyst remarked.
Moreover, it is important to note that FTX still holds 42.2 million SOL, worth $2.19 billion under lock-up. According to the SOL unlock schedule, each month sees the release of 618,400 SOL. This regular monthly unlocking accounts for about 1.1% of the entire SOL holdings of FTX. Notably, a significant event is scheduled for March 1, 2025, where 7.5 million SOL will be unlocked.
In conclusion, although some influencers are celebrating the end of the FTX sell-off, this is not the full reality. While a large chunk of selling pressure may have been very well absorbed by the market in recent weeks, it is not close to an end. The FTX factor for the Solana price is still out there.
Despite that the SOL price has shown tremendous strength in recent weeks, considering the massive selling pressure from FTX. At press time, SOL was trading at $55.31, making the 1,618 Fibonacci extension level at $57.85 once again the key resistance for the bulls.
Featured image from Shutterstock, chart from TradingView.com