Solana Plunges 12% – Is FTX Selling Its SOL To Defend FTT?

Amidst the turmoil surrounding crypto trade FTX, there’s at present one huge loser, Solana (SOL). Whereas the FTT token is on the middle of discussions for a lot of market observers after Binance CEO Changpeng Zhao introduced to promote all FTT tokens, SOL is seeing a large -12% drop in value during the last 24 hours.

Even the FTT token is at present posting a lack of slightly below -3%. So what’s driving the SOL sell-off ? Just some days in the past, SOL skilled a large value spike after Google introduced the launch of a Solana validator.

Early Monday morning, SOL fell from its one-month excessive of $38.78, which it reached on Saturday, to $30.74 on Binance. At press time, the SOL token was buying and selling at $31.34. At the moment’s sell-off has thus worn out all good points following the Google information and is now buying and selling -8% on a weekly foundation.

Solana A Sufferer Of The FTX Drama?

The Ethereum neighborhood, most notably Eric Conner, core dev of Ethereum and co-founder of EthHub have been fast to denounce the supposed “Ethereum killer”. Conner acknowledged by way of Twitter that it’s “humorous as hell” to see the alleged “FTX/Alamada/Solana rip-off” unfold after two years.

It’s so fucking hilarious watching you all understand the FTX/Alamada/Solana rip-off 2 years after most of us referred to as it out and acquired lambasted for doing so.

— eric.eth (@econoar) November 7, 2022

However phrases of warning for Solana buyers will not be solely coming from the ETH neighborhood. Person are questioning if an potential impending FTX implosion can have a cascading impact on SOL.

Take note of #Solana , ftx must promote to cowl bills. If they’re having points

— the BERG (@ADAMBERGMANshow) November 7, 2022

It was just lately revealed that Solana (SOL) tokens are among the many extra important belongings on FTX’s steadiness sheet. Bankman-Fried was an early investor in Solana and has drummed up assist for Solana a number of occasions up to now.

The trade owns about $3.37 billion in cryptocurrencies, with a big quantity being SOL tokens: $292 million in “unlocked SOL”, $863 million in “locked SOL,” and $41 million in “SOL collateral”.

The whole of about $1.2 billion in SOL tokens may very well be a method for FTX to get liquidity and defend the worth of the FTT token, which can also be the primary pillar on FTX’s steadiness sheet. Nevertheless, little is at present recognized about putative SOL promoting by FTX. Nevertheless, the only real relationship between FTX and Solana may very well be a serious drag on the SOL value in the mean time.

Thus, pure hypothesis may be behind the present SOL dilemma. Backdrop is, as described firstly, that FTX has a deep reference to SOL. If there’s a extended financial institution run, there’s at the very least a really excessive likelihood that the Solana token may also take a giant hit.

However, if Bankman-Fried is dumping SOL, it’s positively not the one altcoin. As on-chain analysts note, different tokens are additionally affected of the promoting stress by FTX. These cash embrace CHZ, LOOM, SHIB, LINK, and DYDX.