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Court Allowed FTX to Liquidate its $3.4 Bn Crypto Assets, Will Solana Decline?

Pathik Bhattacharya
Pathik Bhattacharya Published on September 14, 2023 03:19 PM

According to a recent order, FTX can now sell up to $200 million in assets per week. The exchange's largest digital assets were Solana, Bitcoin, and Ethereum.

Court Allowed FTX to Liquidate its $3.4 Bn Crypto Assets
Source: Unsplash

In a significant legal development, Judge John Dorsey at the U.S. Bankruptcy Court for the District of Delaware has granted FTX the authority to liquidate its digital assets to settle its creditors. This ruling permits the defunct exchange to sell assets valued at over $3 billion, including prominent cryptocurrencies such as Solana (SOL), Bitcoin (BTC), and Ethereum (ETH).

The court has outlined a structured approach, allowing FTX to initiate the sale of $50 million worth of digital assets in the first week, with the possibility of increasing this limit to $100 million subsequently. Moreover, the court retains the discretion to further raise the weekly limit to $200 million if deemed necessary.

Implications for Solana (SOL) and FTX Holdings

Solana, a blockchain platform that has gained considerable traction in the crypto space, finds itself in the spotlight following the FTX liquidation ruling. An examination of FTX’s digital asset holdings reveals that Solana accounts for the largest portion.

With approximately $1.6 billion worth of Solana in its possession, FTX holds one-third of its total assets, constituting roughly 10% of the total SOL supply. This sizable volume of SOL has raised concerns and uncertainty within the community, particularly in light of the impending sales.

FTX's portfolio also includes substantial holdings in Bitcoin and Ethereum, with assets valued at over $560 million and approximately $196 million, respectively. However, the percentage of total supplies represented by these assets is significantly lower compared to Solana, amounting to less than 1% for both Bitcoin and Ethereum.

Solana Price Analysis

As per CoinStats, the current price of Solana is $19.05, up 4.27% in the last 24 hours, and the market cap is $7.8B. It has a circulating supply volume of 557,405,035 SOL coins and a maximum supply volume of 557,405,035 SOL coins, with a 24-hour trading volume of $846M.

solana price chart

Source: CoinStats

In recent days, Solana's price experienced a notable downturn, breaching key support levels. The cryptocurrency dipped below $22 and even touched the $17.40 zone, indicating a bearish trend.

Despite this, Solana is showing signs of resilience. It has made efforts to recover, surpassing the $18.50 resistance zone and breaching the 50% Fibonacci retracement level. However, the $19 resistance level is proving to be a formidable obstacle, reinforced by a major bearish trend line.

The cryptocurrency is currently trading below $20 and the 100 simple moving average, facing immediate resistance at the $19.00 level. The $19.40 level and the 100 simple moving average represent critical barriers, closely aligned with the 61.8% Fibonacci retracement level.

solana price chart

Source: TradingView

Conclusion

In conclusion, the recent developments surrounding FTX's permission to liquidate digital assets have brought Solana (SOL) into the spotlight. With FTX holding a substantial amount of SOL, the impending sales have generated uncertainty in the community. Solana's price action, amidst market turbulence, underscores the resilience of this blockchain platform. As events continue to unfold, the cryptocurrency community will closely monitor the impact on both FTX and Solana.

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