In a dramatic turn of events, the cryptocurrency market has experienced a sharp correction, erasing over $250 billion in market capitalization within hours. Spot ETFs have not been spared either, recording unprecedented outflows exceeding $730 million, with Bitcoin accounting for a staggering $670 million and Ethereum $60 million. Solana (SOL), a favorite among altcoins, saw its price plummet below $200, marking interim lows near $175. However, bulls swiftly entered the fray, initiating a recovery to $187.
The turmoil appears to stem from recent remarks by Federal Reserve Chair Jerome Powell. Addressing the concept of a National Bitcoin Reserve proposed by President-elect Donald Trump, Powell stated unequivocally that the Fed has no intention of owning Bitcoin or amending laws to accommodate such ownership. These comments have cast a shadow over regulatory optimism, dampening sentiment that had been buoyed by Trump’s crypto-friendly stance.
Also Read: Solana Price Prediction: Could Spot SOL ETF Approval Propel It to $1,000?
For Solana, the price collapse underscores a volatile period. After striving to sustain momentum near $220, SOL nosedived nearly 20%, breaching key support at $216.76. The short-term outlook raises the critical question: Is Solana poised for a sustained recovery or further decline?
Technical indicators suggest mixed signals. While Solana has rebounded by 7%, the Relative Strength Index (RSI) remains subdued, pointing to potential consolidation between $197 and $186 in the near term. This zone could serve as a battleground for bulls and bears. A breakout above $200 may hinge on a strong surge in RSI to higher regions, while a lack of bullish momentum might see SOL testing lower supports near $155.
For now, the market remains in a precarious state, with Solana’s trajectory dependent on broader market stability and bullish intervention. Investors are advised to monitor key levels closely as the crypto sector navigates this period of heightened uncertainty.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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