After rallying for the past two weeks, it appears that Solana is reversing. The seventh-largest cryptocurrency by market capitalization has dropped by 4.5% in the last 24 hours, according to data from CoinGecko. It now trades at 39.81.
The downturn comes a few hours after on-chain observers reported massive SOL transfers from a crypto wallet owned by now-fallen exchange FTX. Two months ago, a US court gave the company the green light to liquidate over $3 billion worth of digital currencies, including $1.1 billion in Solana.
According to the approved liquidation plan, FTX will cash in crypto assets worth $100 million weekly. That means all the assets in the plan are likely to be under selling pressure over the coming weeks.
Nonetheless, SOL is up 23% in the past seven days, outpacing all the top 10 digital currencies by market capitalization, including Bitcoin and Ethereum. Notably, the major factor behind the Solana rally was FTX Estate’s decision to stake a significant amount of SOL tokens two weeks ago.
FTX’s SOL Transfers
On-chain observer ZachXBT was among the first crypto enthusiasts to inform the blockchain community of FTX’s SOL transfers. Based on the shared screenshot of Solscan, Solana’s block explorer, an FTX-operated crypto wallet sent over 240,0000 SOL tokens estimated to be worth $8.5 million to US-based crypto exchange Kraken earlier today. Before that, the wallet address had transferred 290,000 SOL tokens to a Binance user trading account.
FTX Sells Various Crypto Assets to Raise Funds to Compensate Exchange’s Customers
Since the court approved the exchange’s liquidation plan, the FTX estate, in partnership with Galaxy Digital, has transferred MKR, AAVE, LINK, and ETH to Binance and converted these assets to cash in an effort to raise funds to compensate FTX’s former consumers, who saw their accounts frozen when the platform filed for bankruptcy about a year ago.
Meanwhile, leveraged traders who took long positions in Solana are counting a combined loss of $7 million caused by the token’s sudden price downturn.
Most top 10 crypto assets have also been in red for the better part of the day. However, Bitcoin is up 0.4% to $34,667, while Ethereum trades at $1,815.27 after surging 1.2% in the past 24 hours.
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