Solana Plunges 12% – Is FTX Selling Its SOL To Defend FTT?

Despite all the chaos surrounding crypto exchange FTX (FTX), there’s one major loser: Solana. The FTT token has been the focus of market discussions since Binance CEO Changpeng Zhao declared that all FTT tokens would be sold. However, SOL’s price is experiencing a dramatic -12% decline in the past 24 hours.

FTT tokens are currently showing a slight loss of 3%. The SOL selloff is what? SOL saw a huge price jump just days after Google launched the Solana validator.

SOL traded at $30.74 on Binance on Monday morning. It fell from $38.78 its previous month high, reached Saturday. The SOL token traded at $31.34 as of press time. Today’s sell-off has thus wiped out all gains following the Google news and is now trading -8% on a weekly basis.

SOL USD Solana
Solana falls on the 4-hour-chart below $31. TradingView

Solana a victim of the FTX drama?

The Ethereum community, most notably Eric Conner, core dev of Ethereum and co-founder of EthHub were quick to denounce the supposed “Ethereum killer”. Conner stated via Twitter that it’s “funny as hell” to see the alleged “FTX/Alamada/Solana scam” unfold after two years.

Warnings for Solana investors go beyond the ETH community. Some users are wondering if the impending FTX Implosion could have a cascading affect on SOL.

Recently, it was revealed that Solana (SOL) tokens are among the more significant assets on FTX’s balance sheet. Bankman-Fried, an early investor in Solana, has repeatedly rallied support for Solana in the past.

The exchange owns about $3.37 billion in cryptocurrencies, with a large amount being SOL tokens: $292 million in “unlocked SOL”, $863 million in “locked SOL,” and $41 million in “SOL collateral”.

The total of about $1.2 billion in SOL tokens could be a means for FTX to get liquidity and defend the price of the FTT token, which is also the main pillar on FTX’s balance sheet. This is despite the fact that little information exists about FTX’s alleged SOL selling. The SOL market could suffer from the fact that FTX is the only relationship with Solana at this time.

Therefore, speculation may also have played a role in the current SOL problem. The backdrop, which is described in the beginning, has a close connection with SOL. A prolonged bank panic will increase the likelihood that Solana tokens could also be taken by the banks.

But, if Bankman-Fried is dumping SOL, it’s definitely not the only altcoin. On-chain analysts noteOther tokens also feel the effects of FTX’s selling pressure. This includes CHZ, LOOM and SHIB coins, LINK, and DYDX.

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