Crypto investors started to flee from Solana due to the accumulation of SOL Coin worth billions of dollars during the FTX crash in November. As a result, the prices of FTT and many other cryptocurrencies eroded. Considering the $1 billion selling pressure and the decreasing SOL Coin TVL in low-volume markets, serious consequences can be expected. So, what will happen?
Solana Coin (SOL)
The price of SOL Coin has been shattered for almost a year due to the FTX crash. The price, which dropped to $8, rose back to double digits with Vitalik Buterin’s late-night tweet saying “he escaped the fat cats.” FTX and hedge fund Alameda Research were directly connected to the popular smart contract platform. That’s why they are part of the “Sam Coins” group.
So why are we going back in time today? Of course, because of the recent court decision. SOL Coin came under enormous selling pressure after the Delaware Bankruptcy Court approved the sale of FTX’s digital assets, which include 55.75 million SOL worth $1.062 billion. Judge John Dorsey made his decision at the hearing on September 13. Following the court ruling, the price of SOL dropped to a weekly low of $17.96.
Will the Price of SOL Coin Fall?
Last year, we extensively evaluated the portfolios of FTX and Alameda, which went bankrupt in the last two months. We discussed in detail the key openings for SOL Coin. And although it has been approved, it is not possible for FTX to immediately sell over $1 billion worth of SOL Coin. Crypto trader MartyParty recently said that the concerns were exaggerated by addressing the issues we highlighted last year. Most of the SOL Coin locks will be opened between 2025 and 2028.
According to the schedule, the locks of more than 33 million SOL tokens have not yet been opened. This figure represents more than 60% of FTX’s assets to be sold on the market. According to the terms of converting crypto to fiat currency, FTX will not need to exceed the upper limit of $50 million in the first week and $100 million in the following weeks.
To increase the limit, it requires the prior written approval of the creditors committee and the interim committee or the court’s approval to raise the limit to a weekly $200 million. Assuming that all SOL tokens can be sold, they will need about 10 to 12 weeks to liquidate their total assets, thus distributing the selling pressure over weeks.
On a weekly scale, the volume pressure brought by FTX will be around 4%. Based on the comparison between daily spot volume and the potential selling pressure of SOL, MartyParty said:
“A drop so small that you won’t even notice. If you think this event will collapse Solana, you are wrong, and you should not listen to scammers who know nothing about crypto on social media and YouTube.”
However, there is still a problem. MartyParty may be optimistic because he is an SOL Coin investor, but what determines the impact of news and events on the price is the current state of the market. Dozens of major events can occur in crypto within 12 weeks. While these events occur, SOL Coin’s reaction to the sales can also vary. On the other hand, it is also unknown whether continuous demand will arise in response to each net sale that will come every week. Today, with $7-8 million purchases, we are giving rise signals to major altcoins. The size of the sale should be evaluated along with the lack of market makers and investor apathy.
The price roadmap is clearly visible in the chart above.
