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Elena R
Elena R
Author
Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.
- Nov 05, 2024 11:41 UTC
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Bitcoin vs. Solana: Which Is the Better Bet Ahead of the U.S. Elections?
The upcoming U.S. election could significantly impact the crypto market, particularly Solana (SOL).
ecent declines in Solana's transaction fees suggest waning demand, a bearish signal for the token's price.
A long BTC-short SOL pair trade could be a strategic move to hedge against election uncertainty.
As the U.S. election looms, crypto investors are bracing for potential turbulence that could jolt major tokens like Bitcoin and Solana. 10X Research, led by Markus Thielen, has pitched a strategic “pair trade” to help investors navigate this storm: go long on Bitcoin (BTC) and short on Solana (SOL).
This recommendation is based on recent activity trends in Solana’s network and anticipated regulatory changes following the election.
Why Short Solana?
Despite its reputation as a fast, efficient blockchain, Solana has recently shown some concerning signs. Transaction fees on the network have dropped by half—from $5 million in late October to $2.5 million. For investors, this decline suggests a dip in demand, which can often signal trouble for token prices.
10X Research interprets this cooling of fees as a potential reason to short SOL in the near term, as demand shifts can have a big impact on price performance.
Election Outcomes Could Tip the Scales
The election’s impact on the crypto market could be significant. Thielen notes that if Kamala Harris wins, we might see less chance of U.S.-based ETFs tied to alternative assets like Solana getting approved. This could trigger a steep drop for SOL — potentially around 15%. Bitcoin, being a more established asset, might fare slightly better with a smaller 9% dip, according to Thielen.
Alternatively, if Trump secures the win, the outlook changes. A Trump administration is seen as crypto-friendly, and that optimism could boost SOL, BTC, and Ether (ETH) by around 5%. Bitcoin and Ether, which already have spot ETFs trading in the U.S., could get an extra lift from Trump’s regulatory stance. Solana, however, has no spot ETF yet, though major players like VanEck and 21Shares are eager for approval.
Hedging Against Uncertainty: Why the BTC-SOL Pair Trade Could Be Wise
As the election race tightens, 10X Research’s long-BTC, short-SOL pair trade could be a smart way to hedge against the unpredictable market outcomes tied to the election. Currently, the SOL-BTC trading ratio stands at 0.00235, showing the cautious sentiment among investors as Election Day approaches. The performance of Bitcoin and Solana will largely depend on the next occupant of the White House and their approach to crypto regulation.
SOL Price Current Scenario
The Solana (SOL) price is currently facing uncertainty as it hovers around the $160 horizontal support area, which previously acted as resistance. While the weekly chart remains bullish, daily indicators are signaling bearish trends.
The MACD has crossed bearishly, and the RSI is at risk of falling below 50. If this occurs, SOL could decline to the ascending support trend line at $150.
Such a drop would indicate that the recent breakout above $160 was merely a deviation, suggesting that the overall increase might be corrective. Thus, while SOL has bounced at $160, a further decline to $150 is possible.
As the U.S. election approaches, the crypto market is entering a period of heightened volatility. Stay tuned for what promises to be an exciting and unpredictable ride.
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