$SOL Why is Solana ($SOL ) suddenly dropping? This is the real reason...
The unexpected drop in the price of Solana has left traders seeking answers, and the key factor behind this drop is FTX's massive repayment plan. The bankrupt exchange is preparing to return $16 billion to creditors, but the way these reimbursements are being handled is creating short-term turbulence in the market.
A significant portion of this reimbursement, over $2 billion, is in Solana (SOL). While some believe this means more liquidity is entering the market, the reality is quite different. Instead of generating new demand, these large reimbursements are flooding the market with an excess of SOL tokens, creating a situation of oversupply.
How this affects the price of SOL
🔹 Increased selling pressure: with a massive amount of SOL being distributed, recipients may choose to sell immediately, creating downward pressure on the price.
🔹 Market capitalization adjustment: when a sudden increase in supply occurs, but demand does not increase at the same pace, prices naturally decline in the short term.
🔹 Temporary effect: this drop is not driven by fundamental weakness in Solana, but rather by a technical supply imbalance caused by forced distributions.
What to expect next?
While this liquidation is shaking the market, it is likely to be a temporary phase. Once the excess SOL is absorbed and market conditions stabilize, demand could return, causing prices to rise again. Traders should monitor how quickly SOL finds new buyers and whether long-term holders step in to support the price.
