Solana Gains 5% Despite CPI Latest Data And FTX Liquidation Approval – Here Could Be Why
Solana (SOL) has recorded a 5% gain in the last 24 hours amidst certain concerning developments in the crypto space. On Wednesday, the United States published its Consumer Price Index (CPI) data for August, which shows that inflation rose from 3.2% to 3.7%, higher than the predicted outcome by analysts.
In addition, the bankrupt FTX exchange obtained court approval to liquidate its crypto holdings worth $3.4 billion as it looks to offset its debt.
Normally, developments such as this are expected to induce a selling pressure on crypto assets. However, the majority of the market is staying afloat with slight gains in the last few hours, while Solana has even embarked on a rally, drawing much attention from investors.
Interestingly, popular crypto analyst Michaël van de Poppe has given possible reasons as to why the crypto market may not be moving as widely expected.
Most of FTX’s Solana Are Staked And Inaccessible – Analyst Explains
According to an X post on Wednesday, Michaël van de Poppe states that there should not be much reaction from the crypto market despite the latest CPI data and the court approval for FTX’s liquidation.
Related Reading: Solana Potential Rebound: Can Bulls Hit Their $30 Target?
The analyst explains that most of the Solana, which makes up the bulk of the FTX crypto holdings, with a value of $1.2 billion, is currently staked and thus cannot be liquidated.
Van de Poppe states that only 7 million SOL is available to FTX for liquidation, and most of these tokens have been sold in the past week. Given these circumstances, the analyst predicts a “sell the rumor, buy the news” scenario would likely occur.
FTX gets approval to sell $3.4B in #Crypto assets & CPI data comes in worse than expected
Markets aren't falling down that much, and not much should be happening from it.
The Solana, which corresponds to $1.2 billion of the assets of FTX, is mostly staked and can't be sold.👇… pic.twitter.com/uKG9XefCzy
— Michaël van de Poppe (@CryptoMichNL) September 13, 2023
In relation to the other crypto holdings of FTX, Michaël van de Poppe states the exchange is only allowed to sell $200 million worth of assets per week.
Furthermore, the current market prices have been factored on during the calculation of this liquidation rate; thus, it will likely not produce a high level of selling pressure.
In addition to Solana, FTX also looks to liquidate other assets such as Bitcoin (BTC), Ethereum (ETH), Aptos (APT), and XRP, among others.
Van De Poppe’s Take On CPI Report
Explaining the crypto market’s response to the latest CPI data, Michaël van de Poppe explains that while inflation rates rose higher than predicted in August, the core CPI value was 4.3% as expected, which is lower than July’s value of 4.7%
Related Reading: SOL Price Prediction: Solana Takes Hit and Could Dive To $15
Therefore, the analyst postulates that the US Federal Reserve would likely not be introducing any interest rate hike. This is because the Fed is known to focus more on core CPI data, which provides a long-term outlook on the nation’s inflation rate.
At the time of writing, Solana trades at $18.69, with a loss of 0.29% in the last hour based on data from CoinMarketCap. Meanwhile, the token’s trading volume is up by 47.89% and is now valued at $446.52 million.
Source: Read Full Article