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What Solana did after foundation argued SOL’s ‘security’ label

2min Read

In its public reply to the regulator, Solana Foundation mentioned the token is not a security. Did this confident response play a role in SOL’s uptick?

Solana prices take a U-turn as foundation argues SOL's 'security' label

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  • The brains behind the project did not agree with the security tag of its token.
  • While the price increased, traders opted for pessimism.

Solana [SOL] Foundation has responded to the classification of the project’s native token as a security. In its 10 June official reply, the foundation sparingly argued that the blockchain’s mission was to build exceptional products, further highlighting how it was surprised that the U.S. regulator mentioned the token.


How much are 1,10,100 SOLs worth today?


Ready to evaluate the conditions 

Recall that debates erupted from the crypto community regarding the SEC’s decisions to label some of the top tokens as unregistered securities. 

However, the foundation noted that it was not in its place to go into a brawl with the SEC. Instead, it noted that it was ready to engage the agency to provide regulatory clarity on operating in the country. Solana Foundation said, 

“We welcome the continued engagement of policymakers as constructive partners in regulation to achieve legal clarity on these issues”

Following the response, SOL experienced a turnaround. And according to CoinMarketCap, the token value surged by 6.16% in the last 24 hours. This suggests that investors might be undeterred by regulatory concerns. 

Before the recent recovery, SOL’s price initially decreased by 22% on account of the proscription. But based on the SOL/USD four-hour chart, buyers have been influential in pushing up the price.

At press time, bulls were able to regain confidence by building support at $15.29. This continuous buy pressure led the SOL price to exchange hands at $15.62.

Although the Relative Strength Index at 32.94 suggests proximity to bearish momentum, it still depicts a recovery from the 14.56 value on 10 July. However, if SOL was to edge higher than its current price, it would require additional buying pressure.

Solana [SOL] price action

Source: TradingView

Shorts are not impressed

In the derivatives market, traders haven’t yet swayed from open short contracts on SOL. According to Coinglass, the SOL funding rate was down to -0.039%.

Typically, when the funding rate is positive, it means the perpetual price is higher than the spot price. Thus, long-positioned traders would be willing shorts to keep their positions open.

But since SOL’s funding rate was negative, then it means that more shorts paid longs to hold their position. 


Is your portfolio green? Check the Solana Profit Calculator


Despite the SOL uptick, the weighted sentiment remained in the negative region. For context, the sentiment describes the social volume linked to texts, either optimistic or otherwise about an asset.

Solana weighted sentiment and SOL funding rate

Source: Santiment

When the weighted sentiment is up, it means that the average perception around a token is in favor of a price increase. Therefore, SOL’s position infers that the sentiment toward the token had not yet changed from the period it lost a chunk of its value.

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Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
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