Solana (SOL) recently fell to the $96 price level after a market-wide dip. However, Solana (SOL) has since reclaimed the $105 mark, rallying 5.6% in the last 24 hours, according to CoinGecko data. SOL’s price has also risen by more than 37% over the last month. Let’s discuss why SOL faced a correction and then bounced back.
Why Did Solana Rally And Reclaim The $105 Price Level?
Solana (SOL) followed the market-wide downtrend after the US Senate voted against the CLARITY Act. Many investors may have taken the development as a bearish move on the US government’s end and moved away from the high-risk market.
Solana’s (SOL) latest rally comes after the Federal Reserve decided to raise interest rates by 25 basis points. This is a perplexing development, given that investors usually tend to divest from risky assets when interest rates are high. However, it is possible that the market priced in ahead of the interest rate hike, which may have given room for a slight rebound.
Can The Rally Continue?
The cryptocurrency market environment is highly uncertain at the moment. While the rebound after the post CLARITY Act failure was welcome, higher rates may present challenges for a sustained rally. Solana (SOL) seems to have some support at the $96 to $100 price range, and prices may oscillate between current levels and SOL’s support.
Also Read: Zcash Has Risen 2564% In 1 Year: Why Is ZEC So Popular Now?
While there are some risks in the short term, we will likely see better results over a longer period. Solana (SOL) has become one of the most resilient cryptocurrencies in the market. The asset fell to below $10 after the collapse of FTX in 2022, but has since hit multiple all-time highs. Moreover, Bernstein analysts anticipate Bitcoin (BTC) to reclaim the $100,000 price level by the end of this year. BTC hitting $100,000 will likely lead to a market-wide rebound. SOL could potentially hit $200 under such circumstances.