According to crypto analysis firm PeckShield, an FTX-labeled address has transferred 750,000 Solana (SOL) tokens to two addresses. As per PeckShield, the wallet sent $31 million worth of SOL to another wallet and $110 million to Binance. The move has caused some worry among investors as it may be the beginning of the defunct exchange’s SOL liquidation.
The transfer of tokens to an exchange is considered bearish as it increases the chances of them being sold. SOL’s price has dipped 3.1% in the last 24 hours, and there are worries that it could fall further. However, the token is still up by 23.9% in the weekly charts.
A U.S. court had approved FTX’s request to liquidate its Solana (SOL) holdings earlier this year. Moreover, SOL makes up a majority of FTX’s crypto holdings. According to the U.S. bankruptcy court, FTX held $1.16 billion worth of SOL.
Is FTX liquidating its Solana holdings?
Because the now-defunct exchange has received permission from the court, it is free to liquidate its SOL holdings to repay customers and shareholders. However, whether the market will be able to take the dumping is yet to be seen. Investors can anticipate a spike in sell pressure when FTX begins to sell its SOL holdings if they have not done so already.
Moreover, Solana (SOL) had recently dropped 9% in the daily charts right after FTX founder Sam Bankman-Fried’s guilty verdict announcement. Investors had most probably anticipated that the fallen exchange would begin its liquidation process soon.
Although SOL is one of the best-performing crypto assets in 2023, there could be a massive correction in its price. However, the project has proven its resilience on several occasions and may quickly overcome its latest barrier.
At press time, SOL was trading at $40.33, up 0.8% in the last hour.