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SOL Drops More Than 30% As Alameda Contagion Spreads

  • Solana (SOL) token price falls more than 30% in the last 24 hours.

  • Alameda Research selling SOL to protect FTX tokens.

  • Alameda Research was one of Solana's biggest backers, holding $1.2 billion in SOL.

09-Nov-2022 By: Simran Mishra
SOL Drops More Than

One altcoin that has suffered a lot as a result of the 

FTX and Alameda collapses is Solana (SOL).

 Along with the FTX tokens, Solana's native cryptocurrency SOL has seen significant selling pressure. As of press time, the SOL price has fallen 30% in the last 24 hours at a price of $19.5.

Since the Alameda crisis surfaced last week, the SOL price has dropped by 40% in the last five days. As per data from sources, there have been almost $40 million in SOL long liquidations in the last 24 hours.

Why is Alameda contagion spreading to Solana (SOL)? 

As per reports, Sam Bankman-Fried acquired $1.2 billion in SOL tokens via Alameda. Industry reports suggest that Alameda has been selling its SOL holdings and purchasing FTT in order to limit the fall in the FTX token price.

Furthermore, with the recent acquisition of FTX by Binance, CZ now controls 10% of the tokens. As a result, investors may believe that they would be better served to support the BNB chain rather than Solana.

Sam Bankman-Fried was a vocal supporter of Solana. However, with his companies in grave trouble, it is unclear how long this assistance will last.

Solana Whale Liquidation

On-chain data reports that a massive liquidation by a Solana whale has been undertaken, forcing the SOL price to fall. Citing data from sources, a Chinese crypto journalist explains:

“Solana Whale (3oSE9CtGMQeAdtkm2U3ENhEpkFMfvrckJMA8QwVsuRbE) is under liquidation and currently owes 44,871,609.6 USDC and has 2,450,418.5 SOL in collateral. However, Solana is currently congested owing to the oracle's update.”

It is unclear how far this outbreak will extend or how much SOL will be sold on the open market. Earlier this year, investors faced a similar liquidation issue with LUNA. 

If panic among retail and institutional investors spreads, Solana and the broader crypto market may suffer greater losses. SOL is currently trading at a 90% discount year to date.

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