Solana (SOL) seems to have found some footing at the $100 price level after its recent retracement from $109. CoinGecko data shows that SOL continues to trade in the green zone for most time frames, rallying nearly 37% over the last month. Let’s discuss if Solana (SOL) can hold the $100 price level, or does it face any risk of dipping to $70.
Can Solana Maintain $100, Or Will It Dip To $70?
Solana (SOL) is one of the most resilient cryptocurrencies in the market. The asset faced a steep price crash in 2022 after the collapse of FTX. SOL’s price eventually fell to below $10. However, the asset has made quite a recovery in the years since, hitting multiple all-time highs along the way. The popular crypto hit its most recent peak of $293.31. SOL’s price is currently down by 65.6% from its all-time high.
Solana’s (SOL) recent upswing came after Bitcoin (BTC) reclaimed the $80,000 price level, triggering a market-wide rally. BTC’s rebound was likely due to two major reasons. Firstly, President Trump hosted a cryptocurrency event at the White House. At the event Trump stated that the US plans on purchasing a large amount of Bitcoin (BTC) and other cryptocurrencies. The statement likely led to a massive surge in investor confidence. Solana (SOL) followed BTC’s trajectory soon after the event.
Another reason behind the Solana (SOL) and the market rally is the US Treasury bond buybacks which led to increased liquidity. Higher liquidity likely trickled into the cryptocurrency market.
While the rally was welcome, there is a high chance that the cryptocurrency market will face a correction. Solana (SOL) may see a sideways trajectory for the time being, but chances are high it will fall below the $100 mark. Firstly, Federal Reserve Chair Kevin Warsh delivered a hawkish speech at the Jackson Hole meeting. We may see an interest rate hike this year. Higher rates may lead to Solana (SOL) and other cryptocurrencies facing price dips.
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Secondly, the liquidity from the US Treasury bond buy backs will eventually have to go back. Such a move could also put pressure on the cryptocurrency market.
If Solana (SOL) falls below the $100 mark, asset’s price could settle at the $70 price level.