How Solana price will react after Solend attempts to take over investor’s wallet
|- Solana price is looking top-heavy as it hovers below the $38.2 hurdle.
- Solend, a lending/borrowing platform voted to take control of a whale’s account to prevent a cascade of liquidation.
- Rejection at $38.22 and the fallout from this fiasco could trigger SOL to crash to $25.
Solana price breached a month-long declining trend line in a bullish move, but the recent developments could flip the narrative bearish for SOL.
Solend takes a jab at decentralization
Solend, a Solana-based lending and borrowing platform recently voted to take control of a whale’s account that was close to being liquidated. The said account borrowed $108 million USDC with 5.7 million SOL tokens as collateral.
Roughly 20% of the whale's account would be liquidated if Solana price slides below $22.30. Often, liquidation involves selling tokens on exchanges, which would have a huge market impact.
However, Solend’s move is unprecedented in the DeFi ecosystem because it violates one of the main tenets of Web3 - decentralization. This caused many in the space to critize Solend’s decision.
Insanity, what a joke
— Cobie (@cobie) June 19, 2022
Insanity, what a joke
— Cobie (@cobie) June 19, 2022
Interestingly, a new proposal that aimed to overturn the previous one was started on Monday and received 99.8% of the votes in its favor.
Solana price at a junction
Solana price has produced lower highs since May 15, which can be connected using a trend line. The June 14 swing low at $25.17 formed a base, just above the $24.52 support level. A surge in buying pressure here, pushed SOL to rally 36% in a week.
The run-up also breached the declining trend line and is currently hovering around $34.93. Any attempts at recovery will be neutralized by the $38.22 hurdle. Therefore, the likely direction for SOL would be to retrace and recuperate.
As a result, Solana price is likely to tag the declining trend line, but in a case with high selling pressure, investors can expect SOL to head toward the weekly support level at $24.52. If the sellers push through this support floor, things could turn ugly.
In such a case, Solana price could retest the $19 support level. Investors need to be cautious here as this development could trigger a liquidation of the whale’s wallet. This fallout could further drive SOL prices lower.
SOL/USDT 1-day chart
On the other hand, if Solana price produces a daily candlestick close above $38.22, it will temporarily keep the bears at bay. This move will allow SOL bulls to climb up by 23% to encounter the weekly resistance barrier at $47.43.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.