FTX's Massive SOL Unstake Sparks Sell-Off Fears

FTX and Alameda's recent move to unstake $431 million in Solana (SOL) has sent shockwaves through the crypto market, sparking fears of a potential massive sell-off. The action, which involved unstaking 3 million SOL, is the largest such transaction since November 2023, when FTX and Alameda began selling off assets.

Following the unstaking, around 25,000 SOL, valued at approximately $3.3 million, was promptly sent to Binance. This trend is not new, as similar transactions have been occurring since November 2023, with millions of SOL flowing to exchanges. The continuous liquidation of SOL has raised concerns among market participants, who fear that this could trigger another price crash.

However, it is essential to note that FTX's ability to sell all the tokens at once is restricted by bankruptcy court rules. A September 2023 ruling limits their weekly liquidation to $50 million initially, increasing to $100 million in later weeks. If they seek to sell more than $200 million per week, they must obtain court approval. Despite these restrictions, data from Spot On Chain shows that since November 2023, FTX and Alameda have unstaked a total of 7.83 million SOL, worth nearly $986 million, with most of these tokens sent to Binance and Coinbase for liquidation.

In the wake of this development, Solana (SOL) has emerged as one of the biggest losers, plunging over 20% and wiping out nearly $10 billion from its market cap. Currently, SOL is more than 60% below its all-time high of $294. Looking ahead, SOL now faces a crucial test at the $145 resistance level, which previously acted as support. If SOL manages to surge above $145, it may gain momentum and climb toward $165, signaling a potential recovery.