The connection between Solana (SOL), a major layer-one (L1) blockchain, and the collapsed FTX and Alameda Research still exists nearly two years after the companies’ downfall. As FTX gears up to repay its investors starting in the fourth quarter, it’s expected to speed up its Solana sales to raise the required funds.
A recent transaction by FTX/Alameda has drawn attention in the crypto space, as the company redeemed 178,631 SOL tokens worth $28 million. On-chain analyst Ember revealed that these tokens, previously staked as part of Solana’s proof-of-stake system, will likely be transferred to major exchanges like Coinbase or Binance. This large movement follows a pattern, with FTX/Alameda regularly transferring around 170,000 SOL tokens each month.
Currently, 7.09 million SOL tokens (valued at over $1.1 billion) remain staked at the H4y…gFZ address.
As FTX prepares to make amends with its investors, the question on everyone’s mind is: Will Solana be the one to bear the brunt of the fallout? Let’s find out.
Potential Market Impact
The redemption of such a significant amount of SOL raises concerns about its potential effect on the Solana network and the broader cryptocurrency market. Since FTX’s collapse in November 2022, Solana’s price has been highly sensitive to changes in FTX/Alameda’s holdings. The exchange’s downfall led to Solana’s value dropping to $8 per token, and now, as FTX continues to reduce its holdings, market watchers are keen to see how this move could impact Solana’s staking rewards and network security.
SOL Price Action Analysis
Solana (SOL) experienced a significant rally, climbing 20.43% over the past week and grazing the $160 mark on October 14, 2024. However, after touching a high of $157.8, the price retraced to $155 due to early profit-taking and bearish pressure. Despite this pullback, SOL remains in a bullish trend, supported by a surge in long-term staking of over $2 billion in SOL tokens, signaling strong confidence from holders.
As Solana consolidates, key support at $150 will be critical for maintaining upward momentum. Moreover, a possible breakout above $160 could shoot the prices to $165, while a breakdown may lead to a retest of lower support levels around $144.
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