Emma Nelson 
Solana’s price has recently fallen below the crucial $125 support level, raising concerns among both investors and market observers. This decline comes at a time when significant transactions involving wallets linked to the now-defunct FTX and Alameda Research have been taking place. These movements are believed to be part of the ongoing liquidation process for creditor repayments, which has sparked increased bearish sentiment surrounding Solana. The timing of these transactions, coupled with the overall market struggles, has added to Solana’s recent price woes, making it one of the most discussed assets in the crypto space.
Solana
FTX and Alameda Research Transactions Contribute to the Decline
On March 13, the price of Solana experienced a sharp pullback, falling by 5% in a single day. This decline followed a large transfer of Solana tokens from Alameda Research, where the company unstaked more than $23 million worth of SOL tokens, distributing the funds across 38 different addresses. This action, alongside previous signs of a sell-off from FTX-linked wallets, further fueled concerns about Solana’s price trajectory. These transactions were met with swift market reactions, with holders becoming increasingly wary of the potential influx of SOL tokens into the market, fearing that more unstaking could push the price even lower.
Arkham Intelligence highlighted that these wallets have already distributed substantial amounts of SOL tokens across various addresses, potentially increasing the available supply on exchanges. This growing sell pressure has resulted in caution among potential buyers, contributing to a more bearish outlook for the cryptocurrency in the short term.
Ongoing Unstaking of Solana Assets from FTX
The involvement of FTX with Solana’s assets goes beyond just the recent March 12 transactions. 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, further contributing to the downward pressure on Solana’s price. One of the most significant events occurred in early March when FTX unlocked over 3 million SOL tokens, worth about $432 million, adding to the negative sentiment surrounding Solana.
Despite some positive movement in the broader market at that time, Solana’s price continued to lag behind other major altcoins like XRP and ADA, highlighting the persistent pressure the asset faces due to the ongoing liquidation process tied to FTX.
Potential for Continued Weakness in Solana’s Price
Currently, Solana’s price remains under the influence of FTX’s ongoing liquidation process, leaving market participants wary about the potential for further declines. There are still approximately 5.5 million SOL tokens, valued around $693 million, that are under the control of FTX and Alameda. These tokens are likely to be unstaked or sold in the future, which could continue to apply downward pressure on Solana’s price. Even as broader market conditions improve, including a cooling inflation trend indicated by the latest U.S. CPI and PPI data, the potential for a strong price rebound for Solana seems limited in the near term.
As long as FTX and its affiliates control such a significant portion of Solana’s total supply, many traders are hesitant to accumulate SOL, fearing further sell-offs. This overhang of potential selling is likely to prevent Solana from regaining any upward momentum in the short term, with the cryptocurrency remaining highly sensitive to external liquidity factors.
Solana’s Technical Outlook and Market Sentiment
From a technical analysis perspective, Solana’s price action remains under pressure. After briefly reclaiming the $131 mark, the SOL price quickly reversed direction as bearish sentiment took over. The price has since dropped below the $125 support, a key level that traders are closely watching for signs of potential future price action. Technical indicators suggest that if Solana fails to hold support at these levels, further downside could be expected. Some analysts have pointed to an Elliott Wave pattern suggesting that a reversal could occur around the $112 mark, while others believe that a short position is favorable at the current price level.
Crypto analyst CryptoUB pointed out that the $127 level has seen multiple rejections, which may indicate that it is a critical resistance point for both long and short trading strategies. If the price manages to break above this level, it could potentially trigger a rally. However, for now, the price consolidation on the 4-hour chart aligns with the daily level, providing a stronger case for short trades.
Additionally, market participant CW8900 mentioned a notable sell wall around the $180 price point for Solana. However, a solid buy wall at current levels provides support for the cryptocurrency. This setup suggests that if Solana can break through the falling wedge pattern and surpass the $180 resistance, it could revisit its previous high. Until these technical levels are tested and confirmed, the bearish pressure from ongoing FTX liquidations is expected to continue to weigh heavily on the price of Solana.
