Solana’s price dropped below $125 amid FTX and Alameda Research liquidating assets worth millions
Over 8 million SOL tokens (~$1 billion) have been unstaked since November 2023
A major governance proposal to cut SOL inflation by up to 80% failed to pass
Technical analysis shows SOL facing resistance at $131 with support potentially around $112
5.5 million SOL tokens (~$693 million) remain under FTX/Alameda control, posing continued sell pressure
Solana’s price has fallen below the $125 mark as FTX and Alameda Research continue liquidating assets to repay creditors. The recent price drop coincides with large transactions from wallets linked to these entities.
On March 13, SOL experienced a 5% pullback following a major transfer from Alameda Research. According to Arkham Intelligence, Alameda unstaked over $23 million worth of SOL tokens, distributing them across 38 different addresses.
ARKHAM ALERT: ALAMEDA ADDRESS JUST UNSTAKED $23M SOL TO 38 NEW ADDRESSES
An FTX/Alameda Staking address received $22.9M SOL from a staking address unlock and has just distributed these funds to 37 addresses that have previously received SOL from this address.
This action has added to the selling pressure on SOL. Market participants have grown cautious as they watch these funds potentially entering exchanges.
The distribution of tokens to multiple addresses suggests preparations for market sales. This pattern has created hesitation among buyers who fear further price drops.
This isn’t the first time FTX liquidations have affected Solana’s price. Since November 2023, FTX and Alameda Research have unstaked approximately 8 million SOL tokens valued at nearly $1 billion.
Many of these tokens have already been sold through major exchanges like Coinbase and Binance. These sales have put steady downward pressure on Solana’s price over recent months.
A key unstaking event happened in early March. FTX unlocked over 3 million SOL tokens worth approximately $432 million at that time.
While other cryptocurrencies showed positive momentum, Solana’s price remained subdued. This lag compared to other altcoins like XRP and ADA highlights the impact of FTX’s continuous liquidations.
Future Outlook Remains Bearish
The market remains concerned about the 5.5 million SOL tokens (valued around $693 million) still under FTX and Alameda control. These assets could be unstaked or sold at any time.
This overhanging supply creates a cloud over Solana’s price recovery chances. Even with improving broader market conditions, Solana may struggle to gain upward momentum.
Recent positive economic indicators like cooling U.S. inflation data have failed to lift SOL prices. The shadow of potential further selling continues to dampen buyer enthusiasm.
Traders appear unwilling to accumulate Solana while this risk remains. Many are waiting for clarity on when the FTX liquidation process might conclude.
Technical Signals Point to Weakness
From a technical perspective, Solana’s price action shows weakness. After briefly reclaiming the $131 level, SOL quickly reversed as bears took control.
The fall below the $125 support level is a concerning signal for traders. This price point is now viewed as a critical level for SOL’s future direction.
Some analysts point to an Elliott Wave pattern suggesting a potential reversal around $112. This technical formation could provide temporary support if reached.
According to crypto analyst CryptoUB, the $127 level has seen multiple rejections. This level now serves as a key decision point for trading strategies.
Another market observer, CW8900, noted a strong sell wall around $180. However, a buy wall at current prices may provide some support and prevent further sharp declines.
The proposal would have reduced inflation by up to 80% according to some estimates. It would have replaced the fixed inflation schedule with a dynamic model based on staking participation.
Despite gathering the largest voter turnout in crypto governance history, the proposal fell short. It received 43.6% votes in favor, below the required 66.67% threshold.
Solana’s current inflation rate stands at 4.66%. The existing model starts at 8% annually and decreases by 15% each year until reaching 1.5%.
The high inflation rate can increase selling pressure on SOL tokens. This adds another factor beyond FTX liquidations that may affect price performance.
Despite the proposal’s failure, Multicoin Capital co-founder Tushar Jain called it a victory for Solana’s governance process. The vote demonstrated high community engagement with around 74% of the staked supply participating.
Market Response
The price of SOL showed limited reaction to the governance vote results. The token dipped just 1.5% following the announcement of the proposal’s failure.
However, Solana has seen a steep decline of nearly 60% over the past two months. This drop coincided with the end of the memecoin trading boom on the network.
Network revenue has also dropped by over 90% as memecoin activity has slowed. This reduction in network activity adds another headwind to Solana’s price recovery.
Given the mix of factors affecting SOL, market participants remain cautious. The combination of FTX liquidations, high inflation, and decreased network activity creates challenging conditions for price growth.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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