In a recent official statement on June 10, the Solana Foundation has addressed the classification of its native token, SOL, as a security. The foundation expressed surprise over the mention of the token by the U.S. regulator, emphasizing its commitment to building exceptional blockchain products. While the crypto community had previously debated the SEC’s decisions to label top tokens as unregistered securities, the Solana Foundation stated that it did not intend to confront the regulatory body. Instead, it expressed its willingness to collaborate with the agency to establish regulatory clarity for operating within the country.
Market Response
Following the foundation’s response, SOL witnessed a notable turnaround in its value. According to CoinMarketCap, the token experienced a surge of 6.16% within the past 24 hours. This suggests that investors may be undeterred by the regulatory concerns surrounding SOL. Prior to this recovery, SOL’s price had initially declined by 22% due to the imposed restrictions. However, recent trends in the SOL/USD four-hour chart indicate a significant influence from buyers, pushing the price upward.
Current Status and Outlook
At present, bullish sentiment has taken hold as buyers successfully built support at $15.29, enabling the SOL price to reach $15.62. Although the Relative Strength Index (RSI) stands at 32.94, indicating proximity to bearish momentum, it demonstrates recovery from the previous low of 14.56 recorded on July 10. To surpass its current price level, SOL would require additional buying pressure to sustain an upward trajectory.
Derivatives Market Analysis
Traders have yet to abandon their open short contracts on SOL in the derivatives market. The SOL funding rate, as reported by Coinglass, currently stands at -0.039%. Typically, a positive funding rate indicates that the perpetual price exceeds the spot price, encouraging long-positioned traders to keep their positions open. However, the negative funding rate for SOL suggests that more shorts are compensating longs to maintain their positions.
Weighted Sentiment and Conclusion
Despite SOL’s recent uptick in value, the weighted sentiment surrounding the token remains negative. The sentiment represents the social volume linked to texts, reflecting optimistic or pessimistic views of an asset. When the weighted sentiment is positive, it indicates a general perception favouring a price increase. Therefore, SOL’s current sentiment implies that it has yet to recover from the negative sentiment it faced when it experienced a significant decline in value.
In conclusion, the Solana Foundation has responded to the security classification of its native token, SOL, by expressing surprise and emphasizing its commitment to building exceptional blockchain products. The foundation has chosen to engage with regulatory authorities to establish clarity in operating within the country. Despite recent positive market movements, SOL’s sentiment and derivatives market activity indicates the need for further developments to restore investor confidence fully.
