A prominent trader within the crypto community has recently speculated that Solana may pump if Binance chief Changpeng Zhao (CZ) tweets anything positive about his mooted takeover of FTX.
However, the prospect of Solana making any kind of meaningful recovery looks highly unlikely as no buyers can currently be found.
Solana has been dumping non-stop ever since it faked a pump on Saturday with news that Google was running a Solana validator to help validate the network. The price hit $38 on some exchanges for a brief moment on Saturday afternoon and began dumping soon after.
A day later, when CZ announced that Binance was going to sell its $2.1 billion in FTT tokens, Solana began selling. It’s down by 50% since Saturday. One million Solana tokens are set to be unstaked in the coming hours, probably to be dumped on the market.
FTX has serious liquidity problems and evidence may show that it’s scrambling to collect funds to salvage its operations. It’s unclear why FTX can’t redeem clients’ funds but it may be because it was using clients’ funds to make risky bets which could have gone wrong. The balance sheet of Alameda, which owns FTX, was propped up by its token FTT which is now also crashing.
Alameda claims that it owns 10% of the Solana supply, however, the figure may be much bigger than that. Alameda was the biggest backer of Solana and SBF promoted it widely as an Ethereum competitor.
On-chain analysts have recently claimed that FTX may be exploiting Solana’s Ethereum bridge to sell its tokens. Order books across all exchanges show heavy selling of Solana with some buying orders at $17.1 and $15.1. On leveraged order books, CoinGlass quotes slightly more longs than shorts with more than $54 million in liquidations over the last 24 hours. Crypto.com has also halted USDT and USDC withdrawals from the Solana chain and derivatives trading platform Deribit has paused SOL options and futures expires.
Edit 18:10 UTC, Nov 9: Corrected paragraph four to read ‘one million,’ not ‘one billion’ Solana tokens.