Solana’s price has recently dropped below the $125 support level, causing concern among investors and market watchers. The drop comes amid large transactions involving wallets linked to FTX and Alameda Research.
These moves are believed to be related to the ongoing liquidation of assets for creditor repayments. The timing of these transactions has led to increased bearish sentiment around Solana, adding to its recent price struggles.
FTX and Alameda Research Transactions Contribute to Price Decline
On March 13, Solana price saw a sharp price pullback, falling by 5% on the day. This decline occurred after a major transfer of Solana tokens from Alameda Research. According to Arkham Intelligence, Alameda unstaked over $23 million worth of SOL, distributing the funds across 38 different addresses. This action followed earlier signs of a sell-off from FTX-linked wallets, fueling concerns about future pressure on the asset’s price.
The market reaction to these movements was swift with holders becoming wary of the additional supply of SOL entering the market, fearing that further unstaking could lead to more downward price action.
Arkham Intelligence pointed out that these wallets have already distributed large amounts of SOL tokens to various addresses, which could increase the available supply on exchanges. This growing sell pressure has created caution among potential buyers.
Unstaking History of Solana Assets from FTX
FTX’s involvement with Solana goes beyond the March 12 transaction. Since November 2023, FTX and its trading arm, Alameda Research, have unstaked roughly 8 million SOL tokens, valued at nearly $1 billion. Many of these tokens have already been sold through major exchanges like Coinbase and Binance, contributing to the downward trend in Solana’s price.
The most notable of these events occurred in early March when FTX unlocked over 3 million SOL tokens, worth approximately $432 million.
Despite some positive momentum in the broader market at the time, Solana’s price remained subdued. This lag in performance compared to other altcoins, such as XRP and ADA, has further underscored the pressure placed on Solana by the ongoing liquidation of assets tied to FTX.
Potential for Continued SOL Price Weakness
As of now, SOL price is still under the influence of FTX’s ongoing liquidation process. Market participants are concerned about the 5.5 million SOL tokens, currently valued at around $693 million, that remain under the control of FTX and Alameda. These assets are still poised to be unstaked or sold, continuing the risk of additional downward pressure on Solana’s price.
Despite improving broader market conditions, such as the cooling inflation trend signaled by the latest U.S. CPI and PPI data, Solana’s potential for a price rebound appears limited.
As long as these assets remain in the hands of FTX and its affiliates, traders are hesitant to accumulate Solana, fearing further sell-offs. This overhang of potential selling may prevent Solana from regaining its upward momentum in the near term.
Solana Price Technical Outlook and Market Sentiment
From a technical perspective, Solana’s price action remains under pressure. After briefly reclaiming the $131 mark , the SOL price faced a quick reversal as bearish sentiment took hold. The Solana price has since dipped below the $125 support, which is now viewed as a critical level for future price action.
Technical analysis indicates that if Solana price fails to maintain support at these levels, further downside may be expected. Some analysts point to an Elliott Wave pattern suggesting a potential reversal at around $112.
As per crypto analysts CryptoUB, this level at $127 has seen multiple rejections, suggesting it could serve as a critical point for both long and short trading strategies. “Above = longs, Below = shorts,” the analyst stated, highlighting that the price consolidation on the 4-hour chart aligns with the daily level, presenting a strong case for a short position.
In addition to these technical observations, another market participant, CW8900, mentioned that there is a prominent sell wall around the $180 price point for Solana, but a solid buy wall at the current price range offers support.
This setup implies that if Solana price manages to break through the falling wedge pattern and surpass the $180 sell wall, it could potentially revisit its previous high. However, until these technical levels are tested and confirmed, the bearish pressure from ongoing FTX liquidations will likely continue to weigh on the price.
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