The Solana price has been rocked by the latest bombshell revelations surrounding the collapse of crypto exchange FTX. According to a whistleblower claiming inside knowledge of FTX’s operations, the now-bankrupt company is secretly holding a massive stash of Solana tokens – up to 8% of the entire SOL supply.
Triggering Fears Of Massive Sell-Off
By the numbers, if these allegations are true, this would equate to approximately 46.5 million SOL tokens worth about $7 billion at the current market price, which is $155 at the time of this writing.
“I’m not saying Solana will go to zero, but if this news is true and FTX starts to sell the tokens in the open market, then it could dump the price of Solana significantly,” warned a crypto user who spread the news on social media site X, known only as Wise Advice.
In the wake of the news, Solana’s price plummeted below the critical $160 support level, dropping over 9% in the past two weeks and nearly 4% in the past 24 hours as rumors of FTX’s secret SOL holdings circulated.
Solana Price Risks Freefall
The revelations come on the heels of the FTX estate’s previous sell-off of discounted SOL tokens to repay creditors affected by the exchange’s collapse. Just two months ago, Bitcoinist reported that the estate offloaded a $2.6 billion trove of SOL at around $102 per token.
Venture capital firms like Pantera Capital and Figure Markets scooped up large portions of this discounted SOL allocation. It is worth noting that these tokens remain subject to a multi-year vesting period, limiting their immediate impact on Solana’s market dynamics.
On the other hand, the alleged hidden FTX stash, if true, could overshadow the impact of these sales and pose a formidable challenge to the Solana price in the near term.
With the potential for over $7 billion in Solana tokens to eventually hit the market, the cryptocurrency’s price may face intense selling pressure that could undermine its bullish prospects.
Still, it is imperative to note that these are only rumors and have not been confirmed by the exchange’s bankruptcy state, and that no further information has been released on the matter, including whether the state overseeing the exchange’s repayment operations plans to sell these tokens to repay creditors, if true.
Potential $140s Plunge
In terms of immediate price action, crypto analyst Pratty Crypto has highlighted several technical factors that could signal further downside continuation for the cryptocurrency in the coming days.
Pratty Crypto contends that Solana is facing a “lot of confluence” that points to a potential move towards the $140 zone. This includes Solana trading at a discount to the previous quarter’s mid-range, testing a key quarterly open level, and retracing 62% of its recent price run-up.
In addition, Pratty Crypto warns that the deeper Solana’s price goes into the $130-$150 order block, the less likely it is to hold, potentially leading to more substantial losses.
Featured image from DALL-E, chart from TradingView.com