Solana (SOL) Price Drops Below $125 as FTX and Alameda Continue Liquidating Assets

Solana's price has fallen below the $125 mark as FTX and Alameda Research continue liquidating assets to repay creditors.

The price of Solana (SOL) fell below $125 on Monday as FTX and Alameda Research continue to liquidate crypto assets to repay creditors.

The recent price drop comes as large transactions from wallets linked to these entities were spotted. According to Arkham Intelligence, Alameda unstaked over $23 million in SOL tokens and distributed them across 38 different addresses on Sunday.

ARKHAM ALERT: ALAMEDA ADDRESS JUST UNSTAKED $23M SOL TO 38 NEW ADDRESSES

An FTX/Alameda Staking address received $22.9M SOL from a staking address unlock and has just distributed these funds to 37 addresses that have previously received SOL from this address.

These addresses… pic.twitter.com/9eWuKAY4na

— Arkham (@arkham) March 12, 2025

This action has added to the selling pressure on SOL. As these funds are potentially being moved to exchanges, market participants have become wary.

The distribution of tokens to multiple addresses suggests preparations for market sales, while buyers are hesitant due to the possibility of further price drops.

The liquidation of FTX and Alameda Research assets has been closely followed by crypto traders and analysts. Since November 2023, FTX and Alameda Research have unstaked approximately 8 million SOL tokens, valued at nearly $1 billion.

A significant portion of these tokens has already been sold through major exchanges like Coinbase (NASDAQ:COIN) and Binance. These sales have steadily pushed the price of Solana downwards over recent months.

A key unstaking event occurred in early March when FTX unlocked over 3 million SOL tokens, worth approximately $432 million at that time.

While other cryptocurrencies displayed positive momentum, Solana’s price remained sluggish in response. This lag compared to other altcoins like XRP and ADA highlights the impact of FTX’s continuous liquidations.

The market is keeping an eye on 5.5 million SOL tokens, valued around $693 million, still held by FTX and Alameda. These assets could be unstaked or sold at any moment.

This overhanging supply creates a cloud over Solana’s price recovery chances. Even with broader market conditions improving, Solana may struggle to gain upward momentum.

Despite positive economic indicators like cooling U.S. inflation data, traders appear unwilling to accumulate Solana while the risk of further selling persists. Many are waiting for clarity on when the FTX liquidation process might conclude.

From a technical perspective, Solana’s price action shows weakness. After briefly reclaiming the $131 level, SOL quickly reversed as bears took control.

The fall below the $125 support level is a concerning signal for traders. This price point is now viewed as a critical level for SOL’s future direction.

Some analysts point to an Elliott Wave pattern suggesting a potential reversal around $112. This technical formation could provide temporary support if reached.

According to crypto analyst CryptoUB, the $127 level has seen multiple rejections. This level now serves as a key decision point for trading strategies.

Another market observer, CW8900, noted a strong sell wall around $180. However, a buy wall at current prices may provide some support and prevent further sharp declines.

In other news, a major governance proposal for Solana failed to pass. The proposal, known as SIMD-228, aimed to change Solana’s inflation system.

The proposal would have reduced inflation by up to 80% according to some estimates. It would have replaced the fixed inflation schedule with a dynamic model based on staking participation.

Despite gathering the largest voter turnout in crypto governance history, the proposal fell short, receiving 43.6% votes in favor, below the required 66.67% threshold.

Solana’s current inflation rate stands at 4.66%. The existing model starts at 8% annually and decreases by 15% each year until reaching 1.5%.

The high inflation rate can increase selling pressure on SOL tokens, adding another factor besides FTX liquidations that may affect price performance.

Despite the proposal’s failure, Multicoin Capital co-founder Tushar Jain called it a victory for Solana’s governance process. The vote demonstrated high community engagement with around 74% of the staked supply participating.

The price of SOL showed limited reaction to the governance vote results. The token dipped just 1.5% following the announcement of the proposal’s failure.

However, Solana has seen a steep decline of nearly 60% over the past two months. This drop coincided with the end of the memecoin trading boom on the network.

Network revenue has also dropped by over 90% as memecoin activity has slowed. This reduction in network activity adds another headwind to Solana’s price recovery.