A recent price rally in the Solana (SOL) market ran out of steam midway as traders’ attention shifted to crypto-focused hedge fund Alameda Research’s insolvency rumors.
Alameda Research insolvency rumors affect SOL
On Nov. 7, SOL’s price plunged nearly 6% to about $30.50. The intraday selloff came as a part of a broader pullback trend that started on Nov. 5 when SOL peaked at around $38.75. Between then and now, the Solana token is down over 20%.
The beginning of SOL’s plunge coincided with reports that Alameda Research has liabilities worth $8 billion but may not have liquid assets on its balance sheet to meet those obligations.
Interestingly, the value of all those assets plunged synchronously in the past 48 hours — including SOL, as well as FTX Token (FTT), Serum (SRM) and Oxygen (OXY) — on fears of cascading liquidation if Alameda Research becomes insolvent.
1. low liquidity tokens
$4.6bn of the assets are in low liquidity tokens:
⚰️ $SOL
⚰️ $SRM
⚰️ $MAPS
⚰️ $OXY
⚰️ $FIDAother than SOL there is no way to liquidate the rest of the holdings without completely crashing the markets
the last 4 on the list are highly dillutive too!
— otteroooo (@otteroooo) November 7, 2022
Google partnership, NFT growth
Nevertheless, traders showed interest in holding SOL’s price above…
