Solana weathers FTX storm: SOL up 33% in ‘crunch time’

The Solana ecosystem was in crisis this week, as the market reacted to the collapse of cryptocurrency exchange FTX, with the price of SOL falling sharply — more than halving in one day. But fears that Solana’s devastation would only accelerate overnight did not materialize Thursday. Instead, prices rebounded sharply.

According to reports, the current price of SOL is around $17 Coin Tiger, surged 38% after hitting lows below $13 on Wednesday afternoon. It rose almost to $19 earlier this morning, but has retreated from its 24-hour peak.

Solana is still down 43% for the last week, significantly outpacing the losses of Bitcoin, Ethereum and others — but it has recovered a lot in the past few hours. Markets were broadly up today as the October CPI report showed cooling US inflation, but Solana is more popular today than most.

It might come as a surprise to anyone who measured the temperature in Solana’s ecosystem on Wednesday. As prices continue to plummet, apparently amplified by Solana’s close relationship with FTX and its founder, Sam Bankman-Fried, the network’s founder and prominent builder has attempted to rally supporters who fear a death spiral is forming.

“It’s in our DNA to chew glass and we’ll get through this together,” tweet Co-founder Anatoly Yakovenko on Wednesday.Co-founder Raj Gokal describes FTX crash and Ripple effect as “crucial moment” Used in the Solana ecosystem. In immediate fear and despair, both tried to keep supporters focused on the network’s long-term vision.

In addition to the existing losses, there are reasons to worry about more losses overnight.As of Wednesday afternoon, more than 56.3 million soles— worth about $729 million at the time — would be uncollateralized overnight, potentially flooding the market and pushing the price of SOL even lower under selling pressure.

However, when this number is halved Solana Foundation announced Late Wednesday afternoon, it would not cancel the 28.5 million SOL it had previously entrusted to German cloud provider Hetzner, a network validator whose service was recently banned. Instead, the Solana Foundation withdrew its SOL.

It’s yet another example of so-called “centralization” on Solana, amid criticism from Twitter users that the Solana Foundation’s head of communications, Austin Federa-tweet Its licensing plan “has the worst time imaginable” and the de-staking will be “rescheduled because of something that happened recently.”

Even so, more than 31 million SOL was eventually cancelled as investors regained their funds. CoinGecko’s market data shows that the price fell 11% before unlocking, possibly due to fears of an impending event – but it didn’t fall any further than that. A few hours later, the price of SOL surged again, much to the relief of investors and builders alike.

After hitting its lowest price since March 2021 on Wednesday, Solana diehards may have taken the opportunity to buy SOL. Some whales in this space, such as the famous anonymous NFT investor SOL Big Brain, tweeted They plan to place large buy orders, as staking unlocking could flood the market with low-priced SOL.

There are also signs of life around DeFi on Solana. Jupiter, an aggregation platform, already handles Events worth over $253 million In the past 24 hours, the total transaction volume was 719,000.and Sollender liquidation completed Whale users as it threatens lending protocols Coping with congestion on the platform.

While Solana has so far weathered what some believe to be an existential threat, the situation around FTX is still evolving. The cryptocurrency market is likely to weather the ongoing shock as FTX tries to find a way to be solvent and help customers lock up billions of dollars worth of crypto on the exchange.

On Tuesday, Binance said it had signed a non-binding letter of intent to acquire FTX following the FTX liquidity crunch. On Wednesday, however, Binance pulled out, citing the severity of the FTX issue. Since then, Bankman-Fried has said he will work to raise funds to save the company and make customers whole.

However, more revelations and aftershocks for the cryptocurrency industry could come as the market suffers from the unraveling of one of its biggest players. Solana has suffered some of the worst hits so far this week — but for now at least, the ecosystem is holding on.


The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.

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