- Solana has sold millions of SOL tokens to FTX & Alameda Research which are expected to be liquidated the very next moment the tokens are dispersed
- The SOL price which has drop by more than 65% in the past week is feared to maintain a steep descending trend for a prolonged period ahead
Solana‘s price was badly impacted by the recent FTX meltdown and dropped heavily from levels close to $40 to as low as $12. While many were perplexed because no direct link was visible to the naked eye, the details that emerged later astounded the entire crypto space. Solana in a blog post explained the link between the collapse of both FTT & SOL.
The main highlight of the blog was Solana being the most exposed platform post the FTX collapse. Moreover, the network is also feared to carry the same fate as it has sold millions of SOL tokens to FTX & Alameda Research which are locked right now.
FTX and Alameda Research own nearly 50 million SOL, out of which they received 4 million in August 2020, 34.52 million in September 2020, and 34.52 million in January 2021. The tokens are sold but will be released using the linear monthly unlock mechanism.
Considering the above table. It can be interpreted that Solana has promised the firms to sell, but they may not have custody of the tokens. These tokens will be released for FTX on the basis of linear monthly unlock, of which the last 3 unlocks may occur by January 2028. With the new findings, the SOL price, which was already under extreme pressure, is now in extreme danger.
The SOL price is now testing the lower trend line, which is very crucial at the moment and is believed to drop below the danger zone very soon. Moreover, if FTX & Alameda continue to liquidate their holdings as they receive them, the SOL price may never recover from its bearish captivity.
Presently, the SOL price is trading near crucial levels after dropping by more than 60% in the recent past. If the asset finds more capital, a push may probably rise back above $40–$50, which carries fewer chances of occurring. Meanwhile, if the SOL price fails to sustain at the current levels and slides down hard below $13, a steep drop to $2 to $4 is pretty much possible due to a lack of liquidity at these levels.
The Solana price prediction appears to be pretty pessimistic, but the current realities may be quite likely.