SOL Price Faces Risk of FTX Liquidation
The price of SOL, like many other cryptocurrencies, is currently vulnerable due to both macro and technical factors. In addition to the overall weak market structure that has caused crypto prices to decline since June, there is an impending risk of FTX exchange liquidating its massive holdings in SOL. FTX, which recently filed for bankruptcy, is looking to sell off its crypto assets worth approximately $3.4 billion. This potential liquidation could have a negative impact on Solana and Ethereum, potentially wiping out the gains made since December. However, some experts believe that the sell-off may not happen immediately after receiving approval. Court documents suggest that FTX aims to offload at least $100 million in crypto assets per week, with the possibility of increasing this amount to $200 million.
SOL Price Defends Support at $18
Despite the risks associated with FTX liquidation, the price of SOL has managed to increase by 3.5% to $18.4. Bulls have successfully defended the support level at $18, indicating that the path of least resistance may be to the upside. This has helped alleviate bearish sentiments surrounding the liquidation. Traders are advised to exercise caution, but a potential buy signal from the Moving Average Convergence Divergence (MACD) indicator could lead to more long positions in Solana. The recent bounce off the support level suggests that the knee-jerk reversal above $18 may continue in the short term, especially considering the highly oversold conditions of SOL. However, for the uptrend to remain valid, SOL price needs to surpass $20 and target the subsequent hurdles at $25, $27, and $30.
Hot Take: SOL Price Faces Uncertainty Amid FTX Liquidation Risk
The potential liquidation of FTX’s massive holdings in SOL poses a significant risk to the cryptocurrency’s price. With an estimated value of $3.4 billion, this sell-off could have a negative impact on the Solana ecosystem and erase the gains made in recent months. While some experts believe that the sell-off may not happen immediately after approval, the uncertainty surrounding FTX’s liquidation plans adds to the volatility of SOL price. Despite defending the support level at $18, SOL price remains vulnerable to market dynamics and macro factors. Traders should closely monitor the situation and look for potential signals from technical indicators to make informed investment decisions. As the crypto market continues to navigate through these challenges, the future trajectory of SOL price remains uncertain.
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