BlackRock Dampens Solana ETF Hopes, But Short Squeeze Potential Looms

Solana (SOL) enthusiasts hoping for a repeat of the Ethereum ETF launch were met with disappointment after BlackRock’s Head of Digital Assets, Robert Mitchnick, downplayed the possibility of similar ETFs for altcoins like SOL and XRP. Citing market cap and liquidity concerns, Mitchnick believes only Bitcoin and Ethereum are currently suitable for such products.

This sentiment stands in stark contrast to the optimism that followed the Ethereum ETF approval. Speculation of a domino effect for other altcoins initially boosted SOL’s price, but those gains were short-lived.

Solana Price: Rangebound with Potential for Breakout

Despite the lack of an ETF boost, SOL has displayed some interesting technical characteristics. The price currently sits around $175, trapped within a range established over the past few days. While the bulls might defend this range, a breakout in either direction is a possibility.

Technical indicators offer mixed signals. The RSI suggests some remaining bullish sentiment, while the OBV reflects steady buying pressure. However, development activity on the Solana network has declined compared to Ethereum and Cardano.

Short Squeeze Potential: A Bullish Twist?

One intriguing factor is the possibility of a short squeeze. Short sellers have been increasingly active, potentially setting the stage for a price reversal fueled by forced buy-ins. The $165-$170 zone represents a critical support level where a successful defense could trigger a short squeeze and propel SOL upwards.

Solana Recovers from Lows, But Can It Hold On?

SOL recently displayed some short-term strength, recovering from the $165 support zone. However, the future remains uncertain. Key resistance lies at $182.50, and a successful breach could lead to further gains.

On the other hand, a failure to hold the current range could trigger a decline towards $165 and potentially lower, especially if Bitcoin stumbles.