The bankrupt crypto exchange FTX is preparing to auction a large batch of Solana tokens. We tell you how this will affect the price of SOL.
The sale of Solana (SOL) is part of the liquidation process that was launched following the collapse of FTX in November 2022. The cryptocurrency exchange has sold off assets before to pay off creditors. However, this is the first time the auction format has been used, which could signal potential changes in market dynamics.
Will the crypto community participate in the Solana auction?
FTX liquidators have already sold 25-30 million SOL tokens worth about $1.9 billion at a price of $64 – 60% below the market price at the time of sale. However, the discount came at a price: buyers had to lock in SOL for four years.
“Essentially, you trade time for a discount—you have to freeze your money for four years, but you buy tokens for much less,” explains Caladan’s Eva Weng.
Just got confirmation that the next round of locked #solana coins from the #FTX estate will be an auction, with exact details coming Monday. If you want in, join us. https://t.co/RuA41vgWAx
— Mike Cagney (@mcagney) April 20, 2024
An auction-style sale will promote competitive bidding and may impact Solana’s market price. Mike Cagney, CEO of Figure Markets, confirmed the auction, but final details have not yet been released.
Figure Markets is developing a special mechanism that will simplify the participation of the crypto community in the auction. It is expected to attract accredited US investors as well as non-US buyers. They will be able to participate in setting the offer price and managing subsequent investments. An auction can create excitement around a token and affect its further price dynamics.
What’s happening to Solana (SOL) price?
From a technical perspective, Solana is on an upward trajectory. On March 18, the price reached a local maximum at $210, but then decreased by 44% and by April 13 it tested $116. Then growth resumed and the token managed to win back almost 30% of losses.
This recovery is critical as Solana tests a key resistance level near $156. It coincides with an important Fibonacci retracement level. If Solana manages to gain a foothold above $156, the price could rise 22% to $185, where the 786 Fibonacci level is located. Otherwise, there will be a rollback to the $145.56 area.
FTX Sold Nearly $2 Billion of SOL at a Steep Discount
Managers at FTX exchange sold a significant portion of the Solana (SOL) tokens owned by the bankrupt exchange, earning almost $1.9 billion for them. The strategic transaction was part of the FTX liquidation process initiated following the infamous events of November 2022. Among the buyers were such well-known companies as Galaxy Trading and Pantera Capital, thereby demonstrating potential confidence in the future of Solana.
The scale of the deal and the significant discount underscore institutional investors’ appetite for risk in a market known for its volatility. Recall that during the last bear market, SOL experienced a 97% decline.
