Key Points
- FTX/Alameda unstaked $28M worth of Solana (SOL).
- Potential sale of unstaked SOL could increase selling pressure.
- Despite this, SOL bulls are targeting a price of $172.
- Solana rebounded with the broader crypto market, reaching $154.
- Spot trading volumes spiked by 45%.
- Bullish sentiment driven by technical indicators and market dynamics.
- Growth in Solana-based meme coins contributing to gains.
Unstaking and Market Dynamics
On October 15th, a staking address linked to FTX and Alameda Research unstaked 178,631 SOL, valued at approximately $28 million. This move has raised concerns about a potential increase in selling pressure if these tokens are deposited to exchanges like Binance or Coinbase. Historically, this address redeems around 170,000 SOL monthly, which often ends up on major exchanges, potentially impacting market dynamics.
Despite these concerns, Solana’s market performance has been resilient. The broader cryptocurrency market’s rebound, led by Bitcoin’s surge above $66K, has positively influenced SOL. As a result, Solana reached a weekly high, trading at $154 with a 1.47% gain in 24 hours. Spot trading volumes also saw a significant spike of around 45%, indicating heightened market activity and interest.
Bullish Sentiment and Technical Indicators
The recent price movements have flipped market sentiment towards Solana to bullish. This shift is supported by technical indicators such as the Exponential Moving Average (EMA) crossover. The 20-day EMA crossing above the 100-day EMA suggests a positive market sentiment, favoring buyers and indicating potential upward momentum.
Additionally, the Moving Average Convergence Divergence (MACD) histogram bars have turned green, and the MACD line has shifted above the signal line. These indicators collectively point towards a continuation of the bullish trend, with SOL potentially rallying towards the next resistance level at $172. If the broader market maintains its positive trajectory, a drop to the support level of $149 could present another buying opportunity for investors.
Impact of Short Liquidations and Meme Coins
Solana’s recent gains have also been driven by a surge in funding rates, reaching a seven-day high as short positions came under pressure. On October 14th, $9 million worth of Solana shorts were liquidated, marking the highest level of short liquidations since early August. This forced short sellers to buy back SOL to close their positions, further driving up the price.
Moreover, the growth of Solana-based meme coins has contributed to the bullish sentiment. The market capitalization of these meme coins has surged by 17% in the last seven days, reaching $11 billion. This growth reflects increased investor interest and activity within the Solana ecosystem, adding another layer of support to SOL’s price rally.
Conclusion
In conclusion, while the potential sale of unstaked SOL by FTX and Alameda Research poses a risk of increased selling pressure, the overall market sentiment for Solana remains bullish. Technical indicators and market dynamics suggest that SOL could continue its upward trajectory, targeting a price of $172. The growth of Solana-based meme coins and the impact of short liquidations further bolster this positive outlook. Investors should keep an eye on key support and resistance levels, as well as broader market trends, to make informed decisions.
