FTX Sells $28 Million in Solana, But SOL Shows Little Movement

FTX, the now-defunct cryptocurrency exchange, along with its trading arm, Alameda Research, has unstaked a significant portion of their Solana (SOL) holdings, amounting to around $28 million. Despite this movement, the market reaction has been relatively muted. Analyzing trends in liquidity, trading volume, and market sentiment offers insights into the current state of Solana.

Key Takeaways

FTX and Alameda unstaked approximately 195,669 SOL, valued at around $27.98 million.
Over 8 million SOL has been unstaked since November 2023, yet liquidity remains tight.
Recent data indicates a positive capital inflow into Solana, with Total Value Locked (TVL) increasing to $9.028 billion.
While trading activity remains stable, spot market netflows show an inclination towards selling.
Solana's price action is forming a bullish pattern, suggesting potential for future gains.

FTX injects $28 mln Solana into the market, but SOL barely reacts

FTX's Unstaking Activity

The cryptocurrency exchange FTX and its affiliated trading firm, Alameda Research, have decided to unstake a substantial amount of their Solana holdings. According to insights from Onchain Lens, a platform that tracks blockchain transactions, FTX's wallets were responsible for unstaking 195,669 SOL, which was valued at around $27.98 million at the time.

This action is part of a broader trend in which FTX has been unstaking SOL since November 2023, accumulating over 8 million SOL worth nearly $1 billion from the network. Currently, about 4.048 million SOL remains unstaked, valued at approximately $620 million. While there have been no confirmed sales of these assets yet, it's common for such unstaked tokens to be moved to centralized exchanges in preparation for a potential sale.

Liquidity and Market Movement

Despite the large amount of SOL being unstaked, the market has remained relatively stable. For the last three days, there has been a notable influx of capital, which has helped to counterbalance the additional supply.

The Total Value Locked (TVL)—an important measure reflecting the total capital investors have deposited or staked in the Solana network—has shown positive momentum. After hitting a low of $8.841 billion on January 11, recent deposits totaling $187 million have pushed the TVL up to $9.028 billion.

Solana total value locked (TVL).

During this timeframe, trading activity has also remained strong, with Solana's daily trading volume averaging around $4.186 billion. This steady participation hints at a market that is holding its ground rather than pulling back.

Investor Sentiment

While on-chain metrics suggest strength in the market, the spot exchange data reveals a more cautious outlook. Recent netflow data indicates that approximately $17.466 million in SOL has been transferred to centralized exchanges, which often signals that investors may be preparing to sell.

Although we can't definitively link this inflow to FTX's unstaked assets, there is evidence that retail trading activity has influenced the market dynamics. From January 8 up to the current report, daily netflows have generally trended towards selling, with January 12 being an exception.

Solana Spot Exchange Netflow.

This trend suggests that many traders are adopting a cautious stance, with sellers currently in control of the market.

Technical Analysis of Solana's Price Action

From a technical perspective, Solana currently appears to be forming a bullish structure. The asset is showing a cup-and-handle pattern, which is often a precursor to a price breakout.

If Solana makes a decisive move above the resistance zone between $142.1 and $142.8, it would confirm this bullish pattern. A breakout above that level could drive the price towards $169, a level not seen since December.

Supporting this bullish outlook, momentum indicators like the Money Flow Index (MFI) are showing an upward trend, currently sitting at 73.73, which is firmly within the bullish range. This reading indicates that there is a continued influx of capital into the market.

Solana price prediction

Moreover, if the MFI continues to rise and remains within the 50 to 80 range, it would further reinforce the notion that buyers are active and eager to defend higher price levels.

Conclusion

In summary, while FTX's recent liquidation of Solana holdings didn't trigger significant market volatility, the factors contributing to Solana's stability—such as increased liquidity and consistent trading activity—indicate a market that is preparing for potential movements. As investor sentiment remains cautious, all eyes will be on the resistance levels as Solana continues to evolve in a rapidly changing cryptocurrency environment.