The recent legal action taken by the US Securities and Exchange Commission (SEC) against Kraken has sent shockwaves across the cryptocurrency market, notably affecting Solana (SOL) and various other digital assets. The SEC’s lawsuit alleges that Kraken operated as an unregistered securities exchange, broker, and clearing agency.
Solana’s Market Response to Legal Developments
In response to the SEC’s filing, Solana’s market value has witnessed significant fluctuations. Starting from a 24-hour peak of $60.92, the price experienced a decline to a low of $55.36 before stabilizing somewhat. As of the latest update, SOL is trading at $55.97, representing a 5.53% decrease from its intra-day high.
related: SEC Takes Legal Action Against Kraken, Alleging Unregistered Securities Exchange Operations
Should the bearish trend persist and breach the intra-day low of $55.36, the next notable support level is anticipated around $50. Conversely, a rebound from this point could see Solana retesting its previous high of $60.92, potentially signaling an upward trend.
Market Cap and Trading Activity
Despite the downturn, Solana’s market capitalization stands at $23,707,817,936, reflecting a 5.80% decrease. However, the 24-hour trading volume has surged by 11.30% to reach $1,966,486,642. This uptick in trading volume indicates sustained interest and activity in SOL trading, even amid the challenges posed by the regulatory developments.
Investors might perceive the current price dip as a buying opportunity, potentially fostering a market recovery. Additionally, the heightened trading volume underscores significant market liquidity, a crucial factor for the stability and growth potential of the cryptocurrency.
SOL/USD Technical Analysis
Analyzing the SOL/USD pair from a technical standpoint, the Moving Average Convergence Divergence (MACD) on the 24-hour price chart has crossed below its signal line, serving as a negative indicator. This shift in the MACD suggests a potential reversal of momentum to the downside. Moreover, the histogram has turned negative, reinforcing the bearish sentiment.
The Relative Strength Index (RSI) has also moved below its signal line, currently reading 61.98, contributing to the bearish divergence. This RSI pattern indicates a weakening of bullish momentum and an increase in selling pressure. A continued decrease in the RSI, falling below the 50 mark, could further solidify the negative outlook and potentially lead to more declines in Solana’s price.