SOL the Biggest Gainer in the Top 10 List Despite FTX Liquidation

In a noteworthy development for the collapsed digital asset exchange FTX, Judge John Dorsey has granted the green light for the sale of $3.4 billion worth of cryptocurrency assets. This decision, made at the U.S. Bankruptcy Court for the District of Delaware, marks a pivotal moment in the company&'s efforts to recover from its unexpected bankruptcy last November. The plan includes appointing Galaxy Digital, led by Mike Novogratz, as the investment manager overseeing the sale.

Included in the list of digital assets that FTX will be able to liquidate is Bitcoin, Solana and Ethereum. Despite the looming selloff, all three of these cryptocurrencies were able to print a 24-hour gain. Most notably, Solana’s native token SOL was the best performer in the top 10 list throughout the past day of trading, according to CoinStats.

The Bankruptcy Proceedings

FTX&'s bankruptcy saga began with a sudden and unexpected collapse attributed to alleged criminal mismanagement. Billions of dollars in customer assets vanished overnight, creating a financial chasm initially estimated at $7 billion. The exchange&'s new management has been diligently working to repay creditors and recover lost assets, and the recent court decision is a significant step in that direction.

The Asset Sale Plan

FTX&'s asset sale plan, first outlined in August of this year, encompasses a diverse portfolio of cryptocurrencies, including Solana, Ethereum, and Bitcoin. Under the approved plan, FTX will collaborate with Galaxy Digital to sell these assets, with a weekly cap set at $100 million worth of tokens. Importantly, this limit may be increased to $200 million for individual tokens if the company obtains written authorization from the court. However, the order issued by Judge Dorsey specifies that certain transactions will not count toward the weekly limit, including sales of Bitcoin, Ethereum, stablecoins, and the redemption of stablecoins. Additionally, transactions involving bridging tokens from non-native blockchains back to their native networks will be excluded from the calculation of the limit.

Asset Breakdown

A recent court filing revealed the composition of FTX&'s cryptocurrency assets. Notably, the exchange owns $1.16 billion in Solana (SOL), $560 million in Bitcoin (BTC), $192 million in Ethereum (ETH), and $137 million in Aptos (APT). These valuations are based on cryptocurrency prices as of 31 August 2023, underscoring the dynamic nature of cryptocurrency markets.

Progress and Recovery

It is worth highlighting that FTX&'s efforts to regain financial stability have already yielded some positive results. Approximately $800 million in cash and public equity has been recovered, offering hope for creditors and investors who had been left in the lurch after the exchange&'s abrupt collapse.

Ongoing Legal Challenges

While FTX makes strides toward recovery, its former CEO and co-founder, Sam Bankman-Fried, faces an impending criminal trial scheduled for October 2023. Bankman-Fried, who was once a fresh-faced trader at Jane Street and an MIT graduate, has been slapped with a litany of charges, including wire fraud, securities fraud, conspiracy to commit bank fraud, and defrauding the Federal Election Commission. This high-profile legal battle looms over the exchange&'s tumultuous journey, serving as a reminder of the regulatory challenges that continue to confront the cryptocurrency industry.

Market Overview

CoinStats indicated that the total cryptocurrency market cap stood at $1,084,163,872,905 at press time. This was after the market’s collective valuation rose 1.15% over the past 24 hours.The market’s daily trading volume, however, was not able to record an uptick and had dropped more than 7% during the same period.

The two market leaders Bitcoin (BTC) and Ethereum (ETH), which are included in the list of assets that FTX has been given approval to sell, both posted 24-hour gains greater than 1%. More specifically, BTC’s price had risen 1.15% and ETH gained 1.65%. Subsequently, the leading cryptocurrency was changing hands at $26,229.49, while the largest altcoin in terms of market cap was valued at $1,616.97 at press time.

Price chart for BTC (Source: CoinStats)

BTC was able to reach a 24-hour high of $26,528.91 but had since retraced to trade at its current level. Despite the slight correction, the cryptocurrency’s price was still closer to this peak than its daily low of $25,869.91.

Meanwhile, Solana (SOL), which also finds itself at the mercy of FTX’s looming liquidation, was the top-performing cryptocurrency in the top 10 list in terms of price performance throughout the past day of trading. At press time, the altcoin was up more than 5% - boosting the Ethereum-killer’s price to $18.74. However, this latest increase in SOL’s price was not enough to propel its weekly performance out of the red zone. CoinStats indicated that SOL was still down 4.98% over the last 7 days.

Price chart for SOL (Source: CoinStats)

In addition to strengthening against the Dollar, SOL also outshined the leading cryptocurrency by 3.64%. This meant that 1 SOL token was worth 0.00071417 BTC.

Technical Overview

Daily chart for SOL/USDT (Source: TradingView)

From a technical perspective, SOL’s price had attempted to break below the key support level at $17 on Tuesday, but bulls were able to defend the mark. This influx of buy volume resulted in the altcoin’s price rebounding from the level and entering into a multi-day positive sequence. At press time, technical indicators suggested that this upward move may continue in the coming 24-48 hours.

Firstly, the daily RSI line crossed above the daily RSI SMA line during the past 48 hours. This resulted in a notable bullish technical flag being triggered, which signaled that bulls have gained the upper hand. In addition to this, a second noteworthy bullish technical flag was on the verge of being triggered on SOL’s daily chart. At press time, the MACD line was attempting to cross above the MACD Signal line. Should these two lines cross, it will indicate that SOL’s trend has undergone a bullish trend reversal.

Despite these bullish signs, there was still a negative trend line that SOL’s price will have to overcome before traders and investors can consider entering into a long position for the altcoin. This descending trend line had formed on the cryptocurrency’s daily chart over the past few weeks - a period in which SOL’s price consistently printed lower highs. Notably, this trend line coincided with the 100-day EMA line, which was positioned at around $21.13 at press time.

Therefore, SOL’s price will need to close a daily candle above this technical indicator in order for it to overcome the medium-term trend line. If SOL is able to close a trading session above the 100-day EMA line, then it may attempt to flip the $25 resistance level into support in the following few days. Thereafter, the altcoin’s price will have a clear path to continue its ascent towards the subsequent threshold at $35.

On the other hand, if SOL’s price faces rejection from the 100-day EMA line within the coming week, and fails to close a daily candle above this technical indicator, then it may be at risk of retesting the aforementioned $17 support level. If the sell volume persists, then SOL’s price may drop below this major mark and proceed to drop to as low as $12.75 in the following couple of days.

Disclaimer: Coinpaper does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own research and consult your financial advisor before investing in any digital asset.

This article was originally posted on Coinpaper.com -> Click here to read the article there.

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