Solana (SOL/USD) succumbed to the bear cryptocurrency market on Thursday. On CoinMarketCap, SOL was trading with an intraday loss of 6.63% and a weekly 14% drop.
Solana’s price hit the lowest since June.
Solana trades at $28.9, the lowest price since mid-June. Thursday’s bear momentum in Solana happens amid an inflation report. According to the Labour Department, inflation rose by a yearly 8.2%. The rate surpassed estimates, raising fears that the Fed could hike rates faster in its upcoming meetings.
Nonetheless, ahead of the inflation report, SOL was already in a sustained bear market. Frequent network outages have largely been responsible. The latest was the Solana DeFi protocol, Mango Market, which lost $100 million in an attack. The drain caused a 23% decline in the total value locked on the Solana blockchain.
How is SOL’s outlook in a bear market amid the weak fundamentals?
Solana price: Where next for SOL as the price declines?
The macro concerns dent the outlook for SOL. Attention is shifting to the US Federal Reserve’s action to tame the rising prices. Analysts earmark a 75-basis point rate hike in November after the higher-than-feared inflation numbers. That aligns with the International Monetary Fund’s thoughts after the Thursday report.
IMF Managing Director Kristalina Georgieva urged the US to use the tools available to control prices. She warned of damaging and spillover impacts if the US doesn’t act. In Europe, ECB’s Governing Council member Joachim Nagel has called for robust rate increases to tame rising prices.
Looking at SOL in the broader spectrum of the crypto market, the price could remain bearish in line with the Fed’s expectations. In fact, the crypto billionaire forecasts the crypto bear market to last up to six months. He expects a bull run to occur once the Fed pauses the economic tightening. With the possibility far from reality, a bear market could continue, with pockets of bull short runs.
Solana technical analysis
Technically, SOL has been making lower lows and lower highs since hitting a local top at $48. However, the bulls defended the $30 level, resulting in the formation of a double bottom. The buyer strength was still weak as the price remained largely in consolidation mode. The Thursday drop raises questions about whether a further fall is on the card.
Source – TradingView
At $28.9, SOL has lost the support level, which pits the token back to $26. Currently, sellers have the upper hand as sentiment is bearish. The MACD indicator shows a weakening momentum as the moving averages offer resistance above. In our assessment, SOL could still overcome a drop to $26.
While there is a clear break below $30, the daily candlestick is yet to make a close. A potential scenario to invalidate a drop to $26 is when the price closes above the open at or above $30. In such a case, a bullish pin bar would communicate that buyers remain interested in $30. Conversely, if sellers win and the daily candlestick closes below $30, the price could reach the June lows.
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