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Are Solana traders getting ready for potential sell pressure on SOL due to FTX? Is it too early to tell?

Are Solana traders getting ready for potential sell pressure on SOL due to FTX? Is it too early to tell?

Crypto traders are discussing the potential impact of FTX selling its $1.06 billion Solana stake, causing the SOL price to fall. However, some traders believe that the selling pressure is overblown, as the majority of FTX’s SOL stake is locked until 2025-2028.

The Solana Foundation has revealed that a portion of SOL tokens held by FTX are locked until 2027, with more than 33 million SOL tokens yet to be unlocked. This represents over 60% of FTX’s holdings to be sold in the market.

There are limits on the amount of SOL tokens that can be sold each week, with a cap of $50 million for the first week and $100 million in subsequent weeks. The limit can be increased with approval from the creditors’ committee and the court.

Assuming all SOL tokens are sold, it would take around 10 to 12 weeks to unload FTX’s total holdings, spreading out the selling pressure over time.

The price of SOL may experience volatility during this period, especially if the futures market presents opportunities for market makers or high-volume traders.

The funding rate for perpetual swap contracts on crypto exchanges has plunged to -21.1% per annum, indicating a crowding of short orders. This opens up the possibility of a short squeeze, where short traders are forced to buy back assets at higher prices to close their positions.

Technical analysis shows that SOL has faced resistance from a descending trendline since July and is trading below its 50- and 200-day moving averages.

Summary:

– Crypto traders are discussing the potential impact of FTX selling its $1.06 billion Solana stake.

– Some traders believe that the selling pressure is overblown, as the majority of FTX’s SOL stake is locked until 2025-2028.

– The Solana Foundation has revealed that over 60% of FTX’s SOL holdings are yet to be unlocked.

– There are limits on the amount of SOL tokens that can be sold each week, with a cap of $50 million for the first week and $100 million in subsequent weeks.

– The price of SOL may experience volatility during this period, especially in the futures market.

– The funding rate for perpetual swap contracts on crypto exchanges has plunged, indicating a crowding of short orders and the potential for a short squeeze.

– Technical analysis shows that SOL is facing resistance from a descending trendline and is trading below its 50- and 200-day moving averages.

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