Solana’s price might face more pressure going down as the SOL staking address linked with FTX/Alameda redeems 178,631 SOL, worth around $28 million. This raises concerns about a potential double-digit drop in the altcoin’s value if a large portion of the redeemed SOL is sold on exchanges. The big question now is when this sell-off will happen.
The recent redemption of SOL tokens by FTX/Alameda could lead to these tokens being dumped on exchanges like Coinbase or Binance for selling. This could result in a temporary decrease in SOL’s price in the short term, especially after FTX’s reorganization plan was approved by a Delaware judge, paving the way for over $14 billion in payouts to customers of a collapsed cryptocurrency exchange.
Despite this potential sell-off, SOL is currently benefiting from the overall market trend, trading at $154.56 with an 8% increase over the past week. The altcoin is showing a bullish bias, as indicated by its Parabolic Stop and Reverse (SAR) indicator, which suggests an upward trend and potential reversal points. Traders are advised to hold or open long positions based on this indicator.
Furthermore, SOL’s Relative Strength Index (RSI) is at 59.51, indicating that the coin is gaining strength and moving towards a bullish trend. This positive momentum could push SOL’s price to break above the resistance level of $159.77 and aim for $186.29, a high last seen in July.
However, if FTX starts liquidating its redeemed tokens without enough demand to absorb the increased supply, SOL could see a 15% decline, potentially dropping to the support level of $131.04. If this support level fails to hold, SOL’s price may further decline to $109.55.
In conclusion, while SOL faces some selling pressure due to the recent redemption of tokens by FTX/Alameda, it is currently enjoying a bullish trend supported by market conditions. Traders should monitor the situation closely and be prepared for potential price fluctuations based on FTX’s actions in the market. Remember, this analysis is for informational purposes only and not financial advice. Conduct your research and seek professional guidance before making any investment decisions.