FTX liquidates billions in Solana: Analyzing impact on SOL’s prices

• A scheduled unlock of 11.2 million SOL (~$1.5–$2 billion) from FTX’s estate raised fears of a massive sell-off, pressuring SOL’s price.
• Solana’s transfer volumes plunged ~99% from late 2024 highs, and DeFi TVL shrank ~40% in a month.

Solana [SOL] has faced significant market volatility over the past month. Selling pressure, declining network activity, and FTX-related liquidations have driven this trend.

The cryptocurrency’s price has dropped from February highs of $224 to as low as $140, with concerns mounting over a $2 billion token unlock and major whale transactions.

Source: Messari

On the 1st of March token unlock, 11.2 million SOL entered circulation, valued between $1.57 billion and $2.03 billion. Unlike standard vesting releases, these tokens originated from the FTX bankruptcy estate, raising fears of immediate liquidation to satisfy creditor claims.

This event, combined with large transfers to exchanges, has fueled bearish sentiment in recent weeks.

Solana, once a top-performing asset in early 2025, has struggled to maintain momentum. Since November 2024, its transfer volume has plummeted by 99%, dropping from $1.99 billion to just $14.57 million. Concerns over ecosystem engagement have grown.

Panic selling or strategic move?

Solana’s price has fallen over 30% since mid-February, breaking key support levels that previously signaled bullish trends. 

Source: TradingView

On the 27th of February, SOL fell below $168. The next day, it declined further to $144 following a 2.243 million SOL ($324.62 million) transfer to Coinbase, fueling speculation of large-scale sell-offs.

Arthur Cheong, founder of DeFiance Capital, acknowledged the FTX-related liquidations, stating on social media, 

“Participated in the SOL OTC deal at $64 via Galaxy and received the bullet unlock today. Not selling a single one of them. I think it will be substantially higher in 3 months.”

Despite this, analysts warn that continued sell-offs from FTX’s estate or institutional investors could push SOL below $125-$130, levels identified as the next potential support zone.

FTX Liquidations: a $2 billion overhang or a market opportunity?

A significant portion of Solana’s price action has been influenced by FTX’s bankruptcy liquidation process. This process has resulted in millions of SOL being sold to institutional buyers at heavily discounted rates.

Galaxy Digital, led by Mike Novogratz, was the largest buyer, acquiring 25.5 million SOL at an average price of $64 per token.

Source: X

At current prices near $143, these investors have seen significant gains, but the potential for further selling remains.

FTX’s bankruptcy proceedings have been among the most expensive in U.S. history, with legal fees surpassing $1 billion. Liquidators are under pressure to recover funds for creditors, which could lead to additional SOL sales in the coming months.

Solana’s on-chain collapse

Beyond price action, Solana’s on-chain activity has seen a dramatic decline. As per Glassnode, transfer volume has fallen from $1.99 billion in November 2024 to just $14.57 million in February 2025—a 99% drop.

Source: Glassnode

Total Value Locked (TVL) within Solana’s DeFi ecosystem has also declined, dipping below $9 billion for the first time since November 2024. 

Data suggests that over $500 million in liquidity has moved to competing blockchain ecosystems, weakening Solana’s relative dominance.

Bear market trap or buy-the-dip opportunity?

Looking ahead, Solana faces a critical inflection point. For now, the market is cautiously watching Solana’s price action and institutional movements. Investors weigh the impact of FTX’s liquidation strategy, upcoming unlocks, and broader crypto market sentiment.

While some investors, including major institutional buyers, are holding their positions, the 99% decline in transfer volume and capital outflows from Solana’s ecosystem highlight ongoing challenges.

The next few weeks will be critical in determining whether Solana can stabilize or face further downside pressure.