Solana Remains Resilient Despite FTX Liquidation Concerns
Despite the recent news of FTX’s liquidation approval and its substantial holdings of Solana (SOL), the cryptocurrency has shown remarkable resilience. The Delaware Bankruptcy Court gave FTX the green light to liquidate its digital assets, including $1.16 billion worth of SOL, which represents 20% of Solana’s total market capitalization.
However, despite this revelation, Solana’s price has remained stable and even registered growth. Since Wednesday, when SOL traded at $17.31, the token has increased by 5%. On Friday, September 15, SOL was trading at $18.95 with a market cap of $7.8 billion.
FTX’s Selling Pressure Likely to be Lower
The market sentiment surrounding FTX’s liquidation is positive due to the expectation of lower selling pressure. Although FTX is cleared to sell its holdings, the exchange has set caps on liquidations, limiting it to $200 million worth of assets per week.
This approach was taken to prevent a significant decline in the value of the tokens held by FTX. As a result, Solana is shielded from excessive selling pressure in the short term. Additionally, a large portion of FTX tokens are not currently in the exchange’s possession but will vest over time, further protecting Solana from selling pressure.
Resilience Reflects Both Strong Performance and Previous Decline
The resilience shown by Solana may not solely be attributed to its strong performance but also to its previous decline. Over the past 30 days, SOL has dropped by 18%, indicating that market participants have already factored in the potential impact of FTX’s selloff.
Understanding the broader implications of major market decisions, such as FTX’s liquidation, can empower traders and investors to make more informed decisions and safeguard their investments.
Hot Take: Solana Remains Stable Amidst FTX Liquidation Concerns
Despite FTX’s approval for liquidation and its significant holdings of Solana, the cryptocurrency has remained stable and even experienced growth. The expectation of lower selling pressure from FTX, as well as the vesting schedule for a large portion of their tokens, has contributed to Solana’s resilience. Additionally, the previous decline in SOL’s price suggests that market participants have already priced in the potential impact of FTX’s selloff. Traders and investors can use this knowledge to make informed decisions and protect their investments.
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