The cryptocurrency market is currently experiencing a turbulent phase, with Solana being one of the assets affected by the recent downturn.
Concerns are growing about a potential decline in Solana's price to as low as $100 after it dropped below the critical support level of $200. This downturn has been exacerbated by the Federal Reserve's announcement of a 25 basis point reduction in interest rates during the latest Federal Open Market Committee (FOMC) meeting. The Fed's Chair, Jerome Powell, stated that no further rate cuts are expected until 2025, which has increased pressure on financial markets, including the cryptocurrency sector.
As a result, Solana has experienced a sharp 30% drop from its peak of $263 to its current trading level near $183. The Relative Strength Index (RSI) has fallen below 40, indicating weakness and potential oversold conditions. The trading volume for Solana has increased by 33% to $18 billion, but open interest has declined by 16% to $4.41 billion. This mixed sentiment among traders is reflected in the liquidation data, which shows both long and short positions being liquidated amid high volatility.
The Total Value Locked (TVL) in Solana's ecosystem has dropped from $11 billion to $7.93 billion in just one day, marking a 10% decrease. Market analysts suggest that if the bearish sentiment continues, Solana's price could fall to $160, with further declines possible to $140 or even $100. However, a recovery is possible if bullish sentiment returns and stronger support levels hold. Breaking back above the $200 resistance level could signal a shift in market dynamics and boost investor confidence.
The interplay between bearish and bullish forces will be crucial in determining Solana's trajectory in the coming weeks.