Crypto traders are discussing the potential impact of FTX selling its $1.06 billion Solana stake on the price of SOL. However, some traders believe that the selling pressure is overblown, as the majority of FTX’s SOL stake is locked until 2025-2028. Derivatives traders have also piled on with short orders, which could result in a counter move to the upside. The Solana Foundation has released an update on FTX’s Solana holdings, showing that a portion of SOL tokens held by the defunct exchange are locked until 2027. The selling pressure will be distributed over time, as there is a cap on the amount that can be sold each week. The price of SOL may exhibit volatility in the meantime, especially if the futures market presents opportunities for market makers or high-volume traders. The funding rate for perpetual swap contracts on crypto exchanges has plunged to -21.1% per annum, indicating a crowding of short orders and the possibility of a short squeeze. However, negative funding rates have resulted in flat price returns thus far. Technically, SOL is facing resistance from a descending trendline and is trading below its 50- and 200-day moving averages.
Summary:
– Crypto traders are discussing the potential impact of FTX selling its $1.06 billion Solana stake on the price of SOL.
– Some traders believe that the selling pressure is overblown, as the majority of FTX’s SOL stake is locked until 2025-2028.
– Derivatives traders have piled on with short orders, which could result in a counter move to the upside.
– The Solana Foundation has released an update on FTX’s Solana holdings, showing that a portion of SOL tokens held by the defunct exchange are locked until 2027.
– The selling pressure will be distributed over time, as there is a cap on the amount that can be sold each week.
– The price of SOL may exhibit volatility in the meantime, especially if the futures market presents opportunities for market makers or high-volume traders.
– The funding rate for perpetual swap contracts on crypto exchanges has plunged to -21.1% per annum, indicating a crowding of short orders and the possibility of a short squeeze.
– However, negative funding rates have resulted in flat price returns thus far.
– Technically, SOL is facing resistance from a descending trendline and is trading below its 50- and 200-day moving averages.
