The crypto markets have been on edge amid the ongoing FTX bankruptcy case. In particular, Solana saw a sharp 7% decline yesterday following rumors circulating about a potential massive SOL dump by FTX. However, a closer examination reveals these fears may be overblown.
FTX is indeed scheduled to appear in court this week seeking approval to liquidate holdings across various cryptos, including an estimated $685 million in SOL tokens. Understandably, this sparked concerns about added selling pressure hitting the already shaky markets.
But the crucial nuance is that FTX’s SOL reserves are not immediately available to dump on exchanges. The 47.5 million SOL tokens acquired previously from the Solana Foundation are still mostly locked up per a vesting schedule stretching to 2028. Only small portions unlock in 2025.
So the notion of an imminent flood of FTX’s SOL hitting the markets is fundamentally incorrect. These tokens cannot be accessed prematurely outside the lockup terms. Any suggestion otherwise can be dismissed as unfounded FUD.
In fact, yesterday’s panic-driven 7% SOL selloff may have been an overreaction to misconstrued rumors. From a technical standpoint, the SOL chart remains largely unchanged. Support may emerge around the 61.8% Fib level at $17.39 after breaking the 50% level last week.
Bulls need to reclaim key levels like the 20-day EMA to turn momentum positive again. But the technical picture suggests this recent dip was likely exaggerated and not justified by the actual locked-up status of FTX’s reserves.
