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FTX liquidations: DOGE, TRX and MATIC face “highest sell pressure”

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on Sep 11, 2023
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  • FTX has about $1.3 billion in liquid crypto assets that could be liquidated on Wednesday.
  • While SOL, BTC and ETH make up majority of holdings, pressure might be huge on DOGE, TRX and MATIC prices.
  • Messari analysts shared the outlook in a post on X on Monday.

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Today’s major talking point across the crypto market is the potential impact of an FTX firesale involving multiple coins and tokens.

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Traders positioning themselves for this scenario – expected this week if liquidators at the bankrupt crypto exchange get court’s approval – have already contributed to significant declines for the likes of Solana, XRP and Polygon. Bitcoin and Ethereum also dropped to $25k and below $1.6k respectively.

FTX liquidations and impact on crypto market

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FTX today revealed total assets of $7 billion, of which $3.4 billion have been calculated. Of this amount, about $1.3 billion are liquid assets that could be sold-off immediately is the court approves the liquidator’s request on Wednesday, September 13.

According to analysts at crypto intelligence provider Messari, of the $1.3 billion worth of liquid assets facing selling pressure, the largest holdings to watch are SOL, BTC, ETH, APT, DOGE, TRX, and MATIC.

However, its Dogecoin, Tron and Polygon that face the most sell-off pressure given the amount held relative to these token’s “actively traded volume.” The same cannot be said of SOL, BTC or ETH for instance, despite the value held being massively higher. 

Why do DOGE, TRX and MATIC face the most sell-off pressure?

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In a post on X, Messari analysts opined that an example would be BTC that’s shown to account for $353 million of the FTX/Alameda holdings. According to the platform, this figure represents approximately 1% of Bitcoin’s weekly volume and suggests the market could absorb the anticipated downside pressure. A similar outlook is expected for Ethereum.

Looking at Dogecoin, Tron and Polygon, Messari notes the native tokens are less liquid. As such, the roughly $20-$30 million the collapsed exchange holds accounts for about 6-12% of the respective coins’ weekly volumes. If there’s a major dump, the impact on their markets could be higher.

Chart shared by Messari showing percentage of potential sell-side volume for DOGE, TRX and MATIC. Source X

“While $SOL and $APT have sizable USD figures and relative market volume impacts, these assets are held on the Alameda and venture side of the house and are largely comprised of vesting tokens that are not immediately liquid in open markets,” the post read.

Additionally, it is expected that liquidation for Solana will come with about $9.2 million $SOL being unlocked every month. The outlook suggests a significant reduction is the overall impact of the dump, more likely to be similar to what’s anticipated for BTC and ETH.

DOGE traded at $0.060286, MATIC at $0.504214 and TRX at $0.504214 – with respective weekly performances of -4.7%, -8.6% and +0.2%. (Prices as of 2 pm ET on Monday on CoinGecko).

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Bitcoin Dogecoin FTX Polygon Solana Tron XRP Altcoins Crypto