Amid the chapter proceedings of crypto alternate FTX, the market is in a state of heightened anxiousness, and Solana (SOL) specifically noticed a 7% drop in value yesterday following the unfold of rumors. FTX is scheduled to look in Delaware Chapter Court docket on Wednesday, September 13, to hunt approval for the liquidation of $3.4 billion in SOL, FTT, BTC, ETH and different crypto property.
The occasion has led to widespread issues amongst market analysts and individuals, who speculate that the liquidation may exert vital promoting strain on an already fragile market. As of January 17, FTX’s crypto holdings have been estimated to incorporate $685 million in Solana (SOL) tokens, $529 million in FTT tokens, $268 million in Bitcoin (BTC), $90 million in Ethereum (ETH), and varied different property comparable to Aptos, Dogecoin, Polygon, XRP, and stablecoins.
The Solana State of affairs
Solana, which represents FTX’s largest holding, skilled a pointy decline in its value yesterday. This may be largely attributed to the rumors circulating on crypto Twitter (X) suggesting an enormous dump of SOL by FTX. However, because it seems, this rumor lacks substance. A screenshot that surfaced on Twitter, detailing the property held by FTX debtors as of January 17, 2023, confirms that FTX is in possession of roughly 47.51 million SOL.
Nevertheless, there’s an important detail that many appear to have missed. The SOL tokens held by FTX debtors will not be available on the market. Opposite to the narrative offered within the visible information shared, these SOL tokens are underneath a lockup settlement. FTX, in collaboration with Alameda, had beforehand acquired 16% of the SOL provide instantly from the Solana Basis.
This acquisition got here with strings connected, specifically a lockup schedule. The present stash of 47.51 million SOL, which represents 8.82% of Solana’s complete eventual provide, is certain by this settlement.
Thus, the misperception that this SOL reserve is liquid and primed for a market dump is basically flawed. The fact is that these tokens are locked and can endure a linear vesting course of spanning from 2025 to 2028. Accessing these funds prematurely is just not an choice.
As per the phrases of the settlement, the SOL tokens will endure linear month-to-month unlocks till January 2028. Moreover, particular tranches, such because the 7.5 million SOL acquired from Solana Labs by Alameda Analysis, will solely turn into out there on March 1, 2025. One other tranche of 61,853 SOL is slated for unlocking on Could 17, 2025.
In mild of those info, any worry, uncertainty, and doubt (FUD) suggesting an imminent SOL dump by FTX may be confidently labeled as misinformation.
SOL/USD 1-Day
Yesterday’s 7% drop within the Solana value might have been an overreaction by the market, which believed the rumors of an upcoming dump and offered en masse out of panic. Nevertheless, not a lot has modified within the technical chart image for SOL within the 1-day chart.
Already on August 31, SOL fell under the 50% Fibonacci retracement degree at $20.26. The makes an attempt to regain it failed within the second half of the week final week. Yesterday’s slide has now left SOL susceptible to a correction decrease to the 61.8% Fibonacci retracement degree at $17.39.
A value restoration may be anticipated at this degree. An increase above the 20-day EMA, under which Solana fell in mid-August, could be an essential step for the bulls on the highway to restoration. As then, a recapture of the 50% Fibonacci could be essential.
In a bearish situation, which at the moment appears to be like much less doubtless, SOL additionally loses the 61.8% Fibonacci retracement degree. A drop to $13.30 would then be the bears’ subsequent goal.
Featured picture from iStock, chart from TradingView.com
