Solana (SOL) has experienced a significant price increase, reaching $185, its highest level in two months, driven by recent political developments in the United States. The price surged over 5.5% in the past 24 hours, reflecting market reactions to Joe Biden’s unexpected withdrawal from the presidential race, which has increased the odds of pro-crypto candidate Donald Trump winning.
Biden’s Exit Boosts Market Sentiment
Investors are optimistic that Biden’s exit could benefit the crypto market, given Trump’s more favorable stance on digital currencies. Biden’s administration has been known for its stringent regulations on cryptocurrencies, leading to legal actions against major exchanges like Kraken and Coinbase. Trump’s potential re-election and his promises to end what he calls Biden’s “war on crypto” have fueled positive sentiment. Speculations are also high that Trump may announce a significant pro-crypto policy at the upcoming Bitcoin 2024 conference in Nashville.
SOL/USD hourly price chart. Source: TradingView
Potential SEC Changes and Solana ETF Prospects
A change in leadership at the U.S. Securities and Exchange Commission (SEC) could also bode well for Solana. Analysts suggest that if Trump is re-elected, current SEC Chair Gary Gensler, known for his anti-crypto stance, might be replaced. This change could pave the way for the approval of a Spot Solana exchange-traded fund (ETF), further boosting Solana’s market position.
Source: X
Increased Open Interest and Positive Funding Rates
The bullish outlook for Solana is supported by a rise in the open interest (OI) of its futures contracts, which hit $2.81 billion, the highest since April. Positive funding rates also indicate that traders are willing to pay a premium to maintain their long positions, reflecting continued confidence in Solana’s upward trajectory.
SOL OI and funding rates. Source: Coinglass
Technical Analysis: Descending Triangle Breakout
Solana’s recent gains are part of a breakout from a descending triangle pattern, a bullish continuation signal. Trading above the triangle’s upper trendline suggests potential for further price increases. However, the breakout has been accompanied by declining daily trading volumes, indicating that confirmation is needed. Solana must break above the $185-200 resistance range to sustain its bullish momentum or risk a pullback to around $155.
SOL/USD daily price chart. Source: TradingView
In summary, Solana’s price surge is driven by political developments, potential regulatory changes, and positive market sentiment, with technical indicators pointing to further gains if key resistance levels are breached.
