Solana, one of the top cryptocurrencies in the market, has experienced a significant drop below the critical $200 support level, sparking concerns among investors about a potential further decline to $100. This downward trend in Solana’s price comes in the wake of a broader cryptocurrency market downturn following the recent Federal Open Market Committee (FOMC) meeting.
During the FOMC meeting, the Federal Reserve announced a 25 basis points reduction in interest rates, in line with expectations. However, market uncertainty arose when Federal Reserve Chair Jerome Powell stated that no additional interest rate cuts are expected until 2025. This announcement put pressure on financial markets, including the cryptocurrency sector.
As a result of the decline in Bitcoin, there has been a ripple effect on altcoins and meme coins, leading to a sharp 30% drop in Solana’s price. The cryptocurrency plummeted from a peak of $263 to its current level near $183. Currently, Solana is trading at $190, reflecting a 7.18% loss in the past 24 hours and adding to the bearish sentiment in the market.
Technical indicators such as the Relative Strength Index (RSI) suggest weakness and potential oversold conditions for Solana. If the RSI continues to decline towards 30, it could trigger further selling pressure, potentially pushing Solana’s price down to $160, $140, or even $100 if bears maintain control.
Data from Coinglass indicates a 33% increase in trading volume for Solana, reaching $18 billion, while open interest fell by 16% to $4.41 billion. This suggests heightened trading activity as traders adjust their positions. Liquidation data shows mixed sentiment among traders, with both long and short positions being liquidated, highlighting the high volatility in Solana’s price and the derivatives market.
Furthermore, DeFiLlama data reveals a sharp drop in Solana’s Total Value Locked (TVL) from $11 billion to $7.93 billion, signaling a 10% decline in just one day. This decline in TVL reflects growing bearish pressure and raises concerns for investors about the future performance of Solana.
While the possibility of Solana dropping to $100 remains if selling pressure persists, a potential recovery could occur if stronger support levels hold. The market sentiment is currently uncertain, with the outcome dependent on how bulls and bears navigate the volatile cryptocurrency landscape in the coming days. Investors are advised to closely monitor Solana’s price movements and market developments to make informed decisions amidst the ongoing turbulence in the cryptocurrency market.