Key Points
- Solana ( SOL ) Has fallen by 9% in the past 7 days; uncertainty in U.S. politics and expectations for tighter monetary policies are dragging down the cryptocurrency market.
- Data cited in the report, from CME FedWatch, shows that the probability of the Federal Reserve raising interest rates in December has risen from 84% to 99%.
- If the support area of $80 is breached, SOL faces the risk of falling to $74 or lower. However, the relative strength index ( RSI ) which is close to 25 indicates that a short-term rebound is still possible.
Against the backdrop of deteriorating market sentiment and weakened on-chain activity, Solana ( SOL ) continues to face significant selling pressure, having lost approximately 9% of its value over the past week, and concerns about further declines in its price are growing.
As investors' expectations of a Fed interest rate hike in December rise, this cryptocurrency is approaching an important support level of $80.
Data cited in the report, from CME FedWatch, shows that recent remarks by Federal Reserve Governor Christopher Waller have further reinforced market expectations for a more restrictive monetary policy.
Fed Interest rate hike expectations rose to 99% after the speech by Waller
At a meeting hosted by the Bank of England, Waller expressed support for another interest rate hike at the Federal Open Market Committee's December meeting.
He stated that even though inflation has improved compared to September, he still tends to raise the federal funds rate by 25 basis points.
Waller also indicates that if inflation significantly exceeds his expectations, more radical measures may need to be taken.
These remarks prompted a rapid adjustment in market expectations. According to data cited from CME Group FedWatch Tool, the probability of a rate hike in December rose from 84% the previous day to around 99%.
This change indicates that traders are increasingly expecting the Federal Reserve to maintain a restrictive monetary policy stance.
For cryptocurrencies, higher interest rates usually bring about a more challenging investment environment.
Solana Price Outlook: If the support at $80 is broken, SOL may fall to $74
The technical outlook for Solana remains bearish, as this cryptocurrency is approaching an important support area around $80.
On the daily chart, SOL is approaching the fair value gap ( FVG ) formed during the upward trend in August. For Solana, the current FVG may constitute an important demand zone, and buyers might attempt to defend this level.
However, if the price clearly breaks below that support level, the technical structure will further weaken.
If SOL fails to stabilize around $80, the next important downside target is around $74. If it continues to fall below this level, it could lead to further losses for this cryptocurrency. However, the analysis provided does not indicate any lower confirmed support levels.
The momentum indicator also shows that bearish pressure is intensifying. The Relative Strength Index (RSI) on the daily chart ( RSI ) has dropped to around 23, putting Solana in a clearly oversold range.
Usually, when RSI is below 30, it indicates that the selling pressure has been excessively stretched, and the possibility of a short-term rebound may increase.
Although the overall situation is still relatively weak at present, the oversold momentum reading for Solana indicates that buyers may attempt to initiate a recovery near the existing support level.
The reason why the $80 range is particularly important is that it coincides with a fair value gap that could attract buyers.
If this area can be successfully defended, it may drive a short-term rebound for SOL, and there is a chance to recover to the recent important resistance level of around $95.
On the contrary, if the level of $80 cannot be maintained, the likelihood of a drop to $74 will increase.
