24 June 2024
The Solana price has experienced a sharp decline over the past month in line with the broader market correction, intensifying concerns as rumors of a potential investigation into the popular blockchain platform have recently surfaced.
Regulatory Storm Brewing?
In a social media post on X (formerly Twitter), market expert Crypto Bitlord, who has a considerable following of over 300,000 people, hinted at a rumored investigation into Solana. The post read:
We are hearing rumors that SOL is under investigation and a huge case is about to be made public. This has been brewing for weeks and couldn’t come at a worse time.
While no specific details about the jurisdiction or agency conducting the alleged investigation into Solana have been disclosed, the United States has been at the forefront of an ongoing crackdown on the cryptocurrency industry since the collapse of the FTX crypto exchange in late 2022.
The aftermath of the FTX incident resulted in a series of lawsuits and charges against various industry executives. Notable figures like Binance’s former CEO Changpeng Zhao (CZ) and Coinbase have faced legal scrutiny.
A comparable scenario can be drawn with XRP and Ripple, as they have been engaged in a complex legal showdown over the sale of the digital asset.
For Crypto Bitlord, who has contributed to projects such as Shiba Inu (SHIB), Floki Inu (FLOKI), and Pepe Coin (PEPE), the potential impact on the Solana price is significant. In response to skeptical comments, Bitlord warned, “Don’t cry when SOL is $3 again.”
However, until further news emerges regarding the alleged investigation, these statements remain speculative. Solana’s founders have made no official statements regarding these rumors.
Solana Price Analysis
The Solana price has experienced significant losses across various time frames, with declines of over 9%, 18%, and 22% in the past seven, fourteen, and thirty days, respectively. However, despite the downward trend, trading volume for SOL has remained robust, surpassing $2.8 billion in the past 24 hours alone, according to CoinGecko data.
Digital asset investment firm CoinShares reported notable inflows into various altcoins following the recent price weakness, with Solana seeing inflows of over $2.7 million. This suggests that despite the price decline, some investors see potential value in SOL and are strategically entering the market.
Nevertheless, the Solana price faces a critical test as it approaches crucial support levels. Currently, SOL is trading just above a four-month support level at $127, which marked the uptrend when the Solana price reached a yearly peak of $210 in mid-March.
If selling pressure intensifies and this support is broken, SOL could retrace down to $117, representing the token’s next significant mid-term support level.
Other support walls for SOL in the event of a sustained bearish move are at the $109 and $102 levels. These levels should be watched closely by bullish investors looking to prevent Solana from falling below $100.
Featured image from DALL-E, chart from TradingView.com