There is a sharp drop in Solana (SOL) price as exchanges suspend deposits of stablecoins on the Solana network.
Update Nov 17. (17:30UTC): Binance has since announced that deposits of USDT (SOL) token have resumed. However, the price is still down over 6% at the time of writing
Binance announced that they are temporarily suspending deposits of USDC and USDT on the Solana network until further notice. BitMex and ByBit too suspended the deposits along with Binance.
OKX took one step further ahead and announced to delist USDC and USDT tokens on the Solana network. The announcement from the above exchanges doesn’t mention any more details.
Update: After internal assessment and review, Binance resumed the deposits of USDT on the Solana network. However, there is not much clarity on USDC.
Why are exchanges suspending the deposits?
Last week, Crypto.com halted the deposit and withdrawals of USDC and USDT on the Solana network. The reason they gave users via email was that they had to work on this step because of “recent industry events.”
The CEO, Kris Marszalek, explained the reason for the suspension that they do not want any additional risks from FTX exposure. FTX was the major bridge for the SOL-based stablecoins.
However, a segment of the community also believes that Chinese exchanges are colluding to take down Solana, a competitor to Binance Smart Chain.
The impact on Solana
FTX and Alameda research owned 58 million SOL tokens, representing nearly 11% of the total supply. Since the whole FTX collapse episode, SOL has been hit the worst. The price of SOL has been down by nearly 60% since last week.
SOL has broken all the key supports. $15 was necessary to support, but the coin gave a weekly close below it. Hence the support will work as resistance now. However, in early 2021, SOL spent a few weeks from $15 to $11. It should sustain the support of $11 if there is a slight chance of recovery anytime soon. If $11 is broken, there is not much support before $4.69.
Source: TradingView, SOL/USDT