What happened on the FTX exchange has also deeply affected the general cryptocurrency market. Besides Bitcoin, FTX’s cryptocurrency FTT, one of the coins most affected by the situation was Solana (SOL). Here are the details…
FTX events negatively impacted Solana
During the dispute between exchanges, Solana price fell 30 percent to below $20. The coin dropped from $30.62 to $19.90. cryptocoin.com As we have also reported, since the emergence of the Alameda and FTX crisis last week; The SOL price has dropped by a staggering 50 percent in the last five days. So why do Alameda and FTX affect Solana (SOL)?
According to reports, Sam Bankman-Fried has purchased SOL for $1.2 billion through Alameda. Reports claim that Alameda has sold SOL assets. It shows that with the proceeds from the sale, he bought FTT to contain the fall in the price of the FTX token. In addition, the recent developments regarding the acquisition of FTX by Binance also affected the market.
Binance CEO Changpeng Zhao controls 10 percent of the tokens. Therefore, investors seem to think it would be better to support BNB Chain rather than Solana. Sam Bankman-Fried was one of Solana’s biggest supporters. But while their companies are in deep water, some argue that support won’t last.
A large whale sells SOL
On chain data a Solana whale liquidated SOL. This is thought to be one of the biggest factors that lowered the SOL price. Blockchain journalist Colin Wu uses the following statements based on Solend.fi data:
The Solana whale (3oSE9CtGMQeAdtkm2U3ENhEpkFMfvrckJMA8QwVsuRbE) is in liquidation and currently has 2,450,418.5 SOL (over $51M) and USDC 44,871,609.6 in debt. However, Solana is currently facing congestion due to oracle update.
It’s unclear how far this outbreak can spread and how many more SOLs will be sold on the open market. Earlier this year, investors experienced a similar liquidation with LUNA. The spread of panic among individual and institutional investors could make the market more negative. There could be more bearish in Solana and the wider crypto space. Currently, SOL is trading down 90 percent year-on-year.
Liquidations continue at FTT
Meanwhile, positions of $850 million were liquidated due to the latest market movements. Due to the developments between FTX and Binance, the positions of the traders who opened long positions were closed. During the dispute between exchanges, the price of FTT fell 38.7 percent from $25.71 to $15.76. The decline then continued with the coin dipping below $10. Currently, FTT is changing hands at $4.55, down 75 percent.
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