Solana (SOL) breached the $100 price level after months of struggle. SOL’s price is currently following Bitcoin (BTC). BTC’s ascent to the $80,000 price level pulled the larger cryptocurrency market. BTC’s price has since fallen to the $77,000 price level, and SOL is also displaying a similar correction trend. CoinGecko data shows that SOL’s price has fallen by 3.4% in the last 24 hours, but has rallied by 34.4% in the 14-day charts and more than 39% in the monthly charts. Solana’s (SOL) price is currently facing resistance at around $109. Let’s discuss where the asset could go next.
Solana’s Price Facing Strong Resistance: Where To Next?
Solana’s (SOL) recent rally came after two specific events. Firstly, President Donald Trump hosted a cryptocurrency event at the White House. During the event, Trump stated that the US plans on purchasing a large amount of Bitcoin (BTC) and other cryptocurrencies. The statement may have elevated investor sentiment.
Another event that may have propelled Solana’s (SOL) price is the US Treasury’s decision to increased bond buybacks to nearly $4 billion. The move may have led to increased liquidity flowing into the cryptocurrency market.
However, the cryptocurrency market upswing seems to have slowed down. Solana (SOL) has fallen to just above $102, and Bitcoin (BTC) has dipped to the $77,000-$78,000 range. Chances are high that the cryptocurrency market will face further challenges.
Firstly, Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole meeting was rather hawkish. He particularly highlighted inflation risks. Market participants anticipate the Federal Reserve to raise rates later this month. CME FedWatch data shows that there is a near 60% chance of a 25 basis point interest rate hike. Solana (SOL) and other cryptocurrencies could suffer if rates go up.
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Secondly, the liquidity from the US Treasury bond buy backs will eventually have to be returned. A liquidity reversal could lead to a market-wide correction for the cryptocurrency sector.