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Solana (SOL) is currently at risk of mild liquidation following a teased on-chain transfer initiated by the bankrupt FTX Derivatives Exchange. According to data from crypto analytics provider, Lookonchain, FTX has moved a total of 250,000 SOL worth approximately $13.6 million to Kraken exchange.
This transfer is characteristic of FTX, which has been on a major liquidation push in the past few months. According to the Lookonchain data, the public address of FTX currently holds just about 3,408 SOL worth $185,000 as its holdings.
With liquidation being the most plausible explanation for the transfer of Solana to Kraken by FTX, the market has started reacting to the event. The Solana price has slumped by 5% to give up some of the gains it accrued over the past week, with the coin now trading at $55.34 on spot exchanges.
Despite the observable price fall, Solana has maintained an unexpected surge in its trading volume, which has jumped by 21.35% to $2,974,483,716. This bullish trading volume is a testament to the fact that the positive sentiment is still inherent, despite the knee-jerk reaction to the potential SOL liquidations.
FTX impact no longer valid
The collapse of FTX Derivatives Exchange had a resounding impact on Solana at the time considering the exposure the crypto project had in the company. With permission to sell its crypto holdings by the bankruptcy court to free up funds to repay its creditors, FTX has done just that.
While the sell-off involved many altcoins like Render (RNDR), Polygon (MATIC) and Chainlink (LINK), among others, the impact on Solana was more profound. However, this is no longer the case, seeing as Solana has retested its pre-FT bankruptcy price levels after an impressive showing in October and early November.
With the recent outlook, the current price slump is considered a healthy correction that can push SOL to new heights.