Amid the ongoing bankruptcy proceedings of crypto exchange FTX, the market is experiencing heightened anxiety. In particular, Solana (SOL) saw a 7% decrease in price yesterday following the spread of rumors. FTX is set to appear in Delaware Bankruptcy Court on Wednesday, September 13, to seek approval for the liquidation of $3.4 billion in SOL, FTT, BTC, ETH, and other crypto assets.
This event has created widespread concerns among market analysts and participants, who speculate that the liquidation could add significant selling pressure to an already fragile market. As of January 17, FTX held approximately $685 million in Solana (SOL) tokens, $529 million in FTT tokens, $268 million in Bitcoin (BTC), $90 million in Ethereum (ETH), and various other assets.
The situation with Solana is of particular interest. It is FTX’s largest holding and experienced a sharp decline in its price due to rumors circulating on social media. These rumors suggested that FTX would initiate a massive dump of SOL. However, a screenshot that surfaced on Twitter, detailing the assets held by FTX debtors, confirms that FTX is in possession of approximately 47.51 million SOL.
It is crucial to note that the SOL tokens held by FTX debtors are not readily available for sale. They are under a lockup agreement, as FTX, in collaboration with Alameda, acquired 16% of the SOL supply directly from the Solana Foundation. This acquisition came with a lockup schedule. The current stash of 47.51 million SOL is bound by this agreement, representing 8.82% of Solana’s total eventual supply.
Therefore, the misconception that this SOL reserve is liquid and ready for a market dump is fundamentally flawed. These tokens are locked and will undergo a linear vesting process that spans from 2025 to 2028. Accessing these funds prematurely is not an option. The SOL tokens will experience monthly unlocks until January 2028, with specific tranches becoming available on specified dates, such as March 1, 2025.
In light of these facts, any fear, uncertainty, and doubt (FUD) suggesting an imminent SOL dump by FTX can be confidently labeled as misinformation.
Yesterday’s 7% drop in the Solana price may have been an overreaction by the market, influenced by the rumors and resulting panic selling. However, the technical chart picture for SOL in the 1-day chart has not changed significantly. SOL had already fallen below the 50% Fibonacci retracement level at $20.26 on August 31, and attempts to regain it failed last week. The recent slide has left SOL vulnerable to a correction lower to the 61.8% Fibonacci retracement level at $17.39. A price recovery can be expected at this level, with a rise above the 20-day EMA being an important step for the bulls on the road to recovery. Recapturing the 50% Fibonacci level would also be crucial.
In a bearish scenario, which currently looks less likely, SOL could lose the 61.8% Fibonacci retracement level and drop to $13.30, becoming the bears’ next target.
Overall, while the bankruptcy proceedings of FTX have created heightened anxiety in the market, the rumors of a massive SOL dump lack substance. The SOL tokens held by FTX debtors are locked and will undergo a linear vesting process until 2028, making an imminent dump impossible. It is important for market participants to be aware of these details and not be swayed by misinformation.
(Source: [Link to a credible source](https://www.tradingview.com/x/gUfrC7k6/))
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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