Solana Price Plunges Below March Low, Could It Fall Further?

Solana (SOL) made headlines recently after being labeled as a “security” by the US Securities and Exchange Commission (SEC). As a result, SOL is facing challenges in its price movement. 

In light of this regulatory setback, investors closely monitor SOL’s performance. According to CoinMarketCap, SOL is currently priced at $15.45, sustaining a seven-day slump of 23.13%. 

Source: CoinMarketCap

As the market remains uncertain, one wonders: Will Solana be able to recover from its recent downturn and regain its upward momentum?

SOL Faces Steep Decline As Support Levels Are Breached

The past week has been challenging for Solana (SOL) as it experienced a significant decline, causing it to breach the crucial support zone ranging from $16.7 to $18.8.

This downward spiral was initiated by a weekend slump that coincided with Bitcoin’s (BTC) retest of $25,000. As SOL dropped below both the trendline resistance and March’s low of $16, it shifted into a bearish bias.

Solana price in a downward trajectory. Source: CoinMarketCap

For SOL to regain bullish momentum, it heavily relies on Bitcoin surpassing $26,600 and successfully crossing the $27,000 threshold. However, without this upward movement, the bulls could face challenges in clearing the confluence area situated near $17, which combines bullish order book support and trendline resistance. 

A potential rejection at this critical juncture may trigger a further decline in SOL’s price, potentially leading it toward the support levels at $14.9 or even $12.8.

Solana Foundation Disagrees With SEC Label Of SOL As Security

In separate lawsuits filed on June 5 and 6 against popular cryptocurrency exchanges Binance and Coinbase, the SEC designated the SOL token as a security. The SEC’s classification was based on various factors, including the expectation of profits derived from the efforts of others, as well as the manner in which the tokens are utilized and promoted.

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The Solana Foundation disagrees with the characterization of SOL as a security. We welcome the continued engagement of policymakers as constructive partners on regulation to achieve legal clarity on these issues for the thousands of entrepreneurs across the U.S. building in the…

— Solana Foundation (@SolanaFndn) June 10, 2023

Addressing the SEC’s classification of SOL as a security, the Solana Foundation took to Twitter to express its disagreement. In a statement, the foundation asserted, “The Solana Foundation disagrees with the characterization of SOL as a security.”

According to the SEC, the term “security” encompasses not only traditional investment instruments like stocks, bonds, and transferable shares but also extends to “investment contracts.”

SOL market cap currently at $6.16 billion. Chart: TradingView.com

By labeling SOL as a security, the SEC signals its intention to subject the token to regulations governing securities, which could have significant implications for Solana and its ecosystem.

The classification will likely prompt further scrutiny and discussions regarding the nature and regulatory status of cryptocurrencies in the evolving legal landscape.

Featured image from APKPure