Is Solana still reeling from the FTX fallout?

• Solana faces selling pressure following FTX collapse, with concerns about locked stake and a recent sell off by a large investor.
• Price drops, lower volumes, and declining indicators raise uncertainty for Solana. 

Solana faced significant selling pressure following the collapse of FTX. This was largely attributed to Alameda Research, an entity affiliated with FTX, which held a substantial quantity of SOL tokens. While initial indications suggested that Solana recovered from the aftermath of FTX’s downfall, new data suggests that this may not be the case for SOL.

Realistic or not, here’s SOL’s market cap in BTC terms

Troubles for SOL

According to findings from Delphi Digital, Alameda Research currently holds a locked stake of 8.2% in the Solana cryptocurrency supply. This stake amounts to 45 million SOL, valued at $45 million, and is currently undergoing bankruptcy proceedings.

The staked SOL could be unlocked by mid-2025. The presence of this locked stake raises concerns about the potential impact on the supply and liquidity of SOL in the coming years.

These circumstances continue to cause FUD around SOL. In addition, Delphi Digital reported that a large whale was observed selling a significant portion of its holdings.

The whale could be an early investor in Solana. The account has been executing time-weighted average price (TWAP) orders over the past few months.

Source: Delphi Digital

For context, TWAP orders involve executing trades gradually over a specific time period to achieve an average price aligned with market conditions, minimizing market impact and price volatility.

The whale sold approximately 7 million SOL tokens. And this leaves around 10 million SOL remaining. Moreover, the selling activity adds to the selling pressure on Solana and contributes to the downward price trend.

At press time, Solana was trading at $13.20, representing a decline of 44.70% since testing the $24.02 resistance level on 30 April. The price decline, along with the significant drop in the RSI of SOL, indicates a lack of positive momentum and potential weakness in the market for Solana.

Moreover, the Chaikin Money Flow (CMF) indicator, which measures buying and selling pressure, also experienced a decline. This suggests a decrease in buying pressure and potentially indicates bearish sentiment in the market for Solana.

Source: Trading View

New developments could aid Solana

Alongside the price decline, SOL’s trading volume also fell. This can be seen as a reduction in market activity and liquidity.

Read Solana’s Price Prediction 2023-2024

However, despite these challenges, Solana’s development activity has continued to rise. The increasing development activity suggests that new updates and upgrades could be in the pipeline for the Solana network. These advancements hold the potential to attract new users to the protocol and enhance the overall value and utility of the SOL token.

Source: Santiment