As Solana approaches a comeback, potentially surpassing $137, a black swan event signals a massive influx of supply, which could lead to a significant crash.
Solana has established a strong bullish foundation above the $125 support zone, resulting in several reversals. Since March 2024, the SOL price has rebounded nearly seven times from this demand zone, marking it as an ideal “BUY” area.
However, with the recent reversal from the $125 mark, resistance at the 23.60% Fibonacci level remains. Will the bullish momentum be sustained and extended further?
In the daily chart, Solana exhibits a potential rounding bottom reversal from the $125 zone as the market recovers. Long-tail candles are fueling the bullish momentum, and the SOL price has surged by 11.32% over the past week, rising from a low of $120.51.
However, the recovery rally in Solana finds a massive hurdle, keeping the growth under check at $137. The 23.60% Fibonacci level acts as the neckline of the short-term V-shaped reversal.
Further, the sideways-moving 200-day EMA(blue) above the neckline is ready to act as the second line of bearish attack. Meanwhile, the threat of a death cross looms over Solana with the declining 50-day EMA(yellow).
The momentum indicator, MACD, shows a positive crossover in the average lines, reflecting a boost in bullishness. Further, the rising positive histograms support the breakout chances.
Huge Incoming Supply Warns Solana Crash
Notably, the bankrupt FTX and Alameda group is unloading over $1 billion worth of Solana. Over the past three months, the firm has unstaked 530,000 SOL, valued at approximately $71 million, and redistributed it across multiple addresses.
The transfer activity averages 176,700 SOL per month, valued at $23.5 million, including a recent redemption of 177,693 SOL worth $23.75 million. Despite this substantial release of potential supply, FTX and Alameda still hold 7.06 million SOL, worth $945.7 million, in staked assets.
This unstaking coincides with a recent transfer of 231.4 BTC, valued at $13.5 million, from an FTX/Alameda-linked wallet, with 200 BTC being sent directly to a Coinbase wallet.
Furthermore, with FTX making news again, it is worth noting the Manhattan federal court has scheduled a hearing date for the Former FTX Exec Caroline Ellison.
Will Solana Hold Dominion Over $125?
The $125 level serves as a crucial multi-point support zone for Solana. A bearish close below this level could trigger a market panic sell-off. Coupled with the substantial supply held by the FTX and Alameda group, there are concerns that bearish pressure could intensify soon.
However, as long as the group does not release its holdings, Solana’s uptrend is expected to persist. A potential breakout above $137 could occur this weekend, with targets set at $150 and $160 if the price exceeds $138.
On the downside, if support at $125 fails, the next support levels are $117, $110, and the psychological mark of $100.
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Source: https://thecryptobasic.com/2024/09/13/whats-next-for-solana-as-ftx-unstakes-1b-sol/?utm_source=rss&utm_medium=rss&utm_campaign=whats-next-for-solana-as-ftx-unstakes-1b-sol