Solana’s Recovery Hits a Snag: Could Brazil ETF Launch Provide SOL a Boost?
Solana recovered from its recent sell-off but found resistance again.
Key Takeaways
- SOL rebounded 48% but faces resistance at $160.
- Brazil approves Solana Spot ETF, outpacing U.S. regulatory efforts.
- SOL must hold above $130 to maintain bullish momentum.
After plummeting to a low of $110 on Aug. 5, Solana (SOL) staged a remarkable comeback, surging 48% to reach a high of $163 as the broader market regained its footing.
However, the rally quickly hit a snag as SOL encountered significant horizontal resistance, triggering another downturn.
At press time, Solana was trading at $141, leaving investors wondering if the recovery has lost steam.
However, just as sentiment was starting to wane, a potentially game-changing developer emerged from Brazil. The country’s Securities and Exchange Commission (CVM) has greenlit its first Spot Solana ETF.
Will this milestone be enough to propel SOL back on its upward trajectory, or will the current resistance prove too great to overcome?
Brazil Getting Solana ETFs Before US?
CVM passed a proposal for Solana Spot ETF, putting Brazil ahead of the U.S., where similar products are still under regulatory review.
The ETF, developed by QR Asset and managed by Vortx, awaits final approval from the Brazilian Stock Exchange (B3).
While Brazil is broadening its crypto ETF landscape by introducing Solana to its existing Bitcoin and Ethereum offerings, the prospect of a Solana ETF in the U.S. remains shrouded in uncertainty, hindered by ongoing regulatory hurdles and complex political considerations.
SOL Price Analysis
The price of SOL fell to a low of $110 on Aug. 5 but quickly snapped back and closed the daily candle above its horizontal support of $130. This low could have concluded its long-lasting corrective phase from mid-March when it reached a yearly high of $210.
A recovery followed from its recent low, but it was stopped at the horizontal resistance zone at around $160, sending it back to the $140 area today. Now, two scenarios lay ahead, depending on whether its Aug. 5 low was the final one.
If the price continues its downward trajectory and falls below the $130 area again, the possibility of a staring uptrend from Aug. 5 would be slim, if not completely invalidated. This would mean SOL fell below its 0.618 Fibonacci retracement level, which usually supports the price of its retracements.
However, the price did start a new bullish phase on Aug. 5, and we saw its first sub-wave develop on the current decline. In that case, it should hold above $130 and make another stronger momentum uptrend above the horizontal resistance of $160. A breakout above this level would strongly confirm this uptrend, in which case we could anticipate values above $200.
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