Solana traders need to watch out for this sign of selling pressure

• The crypto wallet associated with the bankrupt FTX exchange and trading firm Alameda bought back 177,693 SOL of the stake.
• The wallet address holds another 7.057 million SOL tokens worth $943 million.
• Solana holders should be aware of selling pressure on SOL if more tokens are transferred to a centralized exchange.
• SOL is trading at $134.80 at the time of writing.

A crypto wallet identified as linked to the address of the bankrupt FTX exchange bought back more than $23 million in Solana stake on Thursday, according to data from Solscan. Solana traders should watch the address to see if SOL tokens are transferred to a centralized exchange, as this could increase selling pressure on the coin, which is trading at around $135 at the time of writing.

Solana may face increasing selling pressure

The bankruptcy of the FTX exchange began in November 2022. The exchange ran out of client funds along with sister firm Alameda. A crypto wallet associated with FTX/Alameda bought back 177,693 SOL tokens worth $23.75 million from the Solana Proof-of-Stake stake on Wednesday, according to Solscan data. Once the tokens are unbundled, they can be moved to a centralized exchange or an Over-The-Counter (OTC) desk for sale.

The wallet associated with FTX cancels SOL

If unallocated tokens are transferred to centralized exchanges, it would contribute to an increase in SOL exchange reserves and would likely have a negative impact on prices.

The wallet associated with the exchange holds another 7.057 million staked SOL tokens worth $943 million. Asian journalist and crypto expert Colin Wu notes that most of the SOL tokens held by FTX could have been sold through OTC trading.

The price of Solana risks falling

Solana is in a multi-month uptrend that started in October 2023, although it has traded mostly sideways in recent months. SOL rose to a peak of $210.18 on March 18. Since then, the token has corrected to $134.63. Solana has traded in ranges since March, between $210.18 and $110.

If selling pressure builds, SOL could sweep liquidity to $125.61, a key support and March 1 low. This would mark a 6.71% drop in the altcoin’s price.

SOL/USDT Daily Chart

A daily candle close above the September 10 high of $138 could invalidate the bearish thesis. In this case, SOL could target the psychologically important price level of $160.