Technical Analyst @DU09BTC warned that 18 million Solana tokens are due to hit the market following the end of their staking lock-in period at the current epoch. He fears that holders will exit positions causing a “second wave of selling.”
18 mil #SOL about to hit the market within 24h. ?
Those with a lot of coins locked in staking are about to join the liquid supply.
This will represent a second wave of selling.
The lesson from Terra was to never lock your coins. You may regret it. pic.twitter.com/WBZ7tAUZBH
— Duo Nine | discord.gg/ycc (@DU09BTC) November 9, 2022
The 18 million tokens represent approximately 5% of the SOL circulating supply.
FTX has ties to Solana
On rumors of FTX’s insolvency, the past 24 hours have rocked cryptocurrency markets. Early evening Tuesday saw markets rally on news of Binance stepping in to bail out its struggling rival.
In response, market leader Bitcoin jumped to $20,700, but a sharp sell-off occurred moments later, which ended as BTC bottomed at $17,190 – a level not seen since November 2020.
Binance CEO Changpeng ‘CZ’ Zhao later reiterated that the FTX deal is non-committal, saying the exchange is able to withdraw from proceedings should due diligence turn up unacceptable risk.
There is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time. We expect FTT to be highly volatile in the coming days as things develop.
— CZ ? Binance (@cz_binance) November 8, 2022
The bull trap likely boiled down to the market realizing that the FTX black hole may be too much for Binance to take on, and the contagion risk is far from contained.
Since the start of this week, Solana has lost 51% of its value, with some analysts expecting more losses to come.
Commenting on recent events, the founder of Crypto Banter Ran Neuner referenced the ties between Solana and FTX, saying the former has now “lost all of the support and investment” from the latter.
He also speculated that, should Binance follow through with the FTX deal, Solana would play second fiddle to rival layer 1 chain BNB.
No doubt, given the current situation, SOL holders will be mulling over their current investment strategy.
More network outages?
The Solana chain is heavily associated with network outages due to the frequency of their occurrence. Since the start of the year, 13 outages have been logged, with Jan 6 recording the longest incident time of 16 hours and 24 minutes.
As the FTX situation was unfolding on Nov. 8, DeFi protocol Solend warned that transactions were failing due to network issues cropping up.
Solana is currently experiencing network issues, causing transactions to fail. Some are still going through, so try again if your transaction fails.
— ?? Solend (we’re hiring!) (@solendprotocol) November 8, 2022
Despite the heads-up from Solend, the Solana uptime tracker has not recorded any mainnet network outages since October 1.