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Solana (SOL) is currently at risk of a soft liquidation following an on-chain transfer triggered by the bankrupt FTX Derivatives Exchange. According According to data from crypto analytics provider Lookonchain, FTX has moved a total of 250,000 SOL worth approximately $13.6 million to the Kraken exchange.
This transfer is characteristic of FTX, which has been on a major liquidation drive in recent months. According to Lookonchain data, the FTX public address currently has around 3,408 SOL worth $185,000 as holdings.
With liquidation being the most plausible explanation for FTX’s transfer of Solana to Kraken, the market has begun to react to the event. Solana price has fallen 5% to give up some of the gains it accumulated over the past week, and the coin is now trading at $55.34 on spot exchanges.
Despite the observable price drop, Solana has maintained an unexpected increase in its trading volume, which has increased by 21.35% to $2,974,483,716. This bullish trading volume is a testament to the fact that positive sentiment remains inherent, despite the knee-jerk reaction to potential SOL sell-offs.
FTX impact is no longer valid
The collapse of FTX Derivatives Exchange had a resounding impact on Solana at the time considering the exposure the crypto project had on the company. With the bankruptcy court’s permission to sell its cryptocurrency holdings to free up funds to pay its creditors, FTX has done just that.
While the sell-off involved many altcoins such as Render (RNDR), Polygon (MATIC), and Chainlink (LINK), among others, the impact on Solana was deeper. However, this is no longer the case as Solana has retested its pre-FT bankruptcy price levels after an impressive performance in October and early November.
With the recent outlook, the current price decline is considered a healthy correction that can take SOL to new heights.
