Summary:
- Solana is down 87.76% from its all-time high of $260 set in November 2021.
- The SOL/USDT chart indicates that Solana is in bear territory and could keep falling in the following weeks.
- A weak Bitcoin fueled by US Fed Chair Jerome Powell’s comments at Jackson Hole could accelerate Solana’s woes.
The popular digital asset Solana has experienced a textbook 87.7% pullback from its all-time high of $260 to current levels around $31. A pullback of this magnitude in previous bear markets usually marks the bottom for any cryptocurrency. For example, the 2018 to 2019 bear market had some digital assets suffering average corrections of 70 – 90% before finding a floor.
Solana’s Daily SOL/USDT Chart Still Hints of Weakness
However, the daily SOL/USDT chart below hints that Solana’s woes in the crypto markets could continue for the rest of August and roll into September. From the chart, it can be observed that Solana is trading below the 50-day (white), 100-day (yellow), and 200-day (green) moving averages. The daily MACD further confirms the pullback by Solana, with its histograms pointing towards continual selling.
Bitcoin’s Weakness Will Most Likely Affect Solana.
However, the daily MFI and RSI are in oversold territory at values of 16 and 32, respectively, thus indicating a potential bounce for Solana in the following days.
But, as with all altcoins, Solana’s fortunes are tied to that of Bitcoin. Yesterday, Bitcoin was dealt a significant blow in the crypto markets after US Federal Reserve Chairman, Jerome Powell, indicated that interest rates were here to stay during his speech at Jackson Hole.
Consequently, Bitcoin dipped below the $20k psychological support to post a local low of $19,920. Bitcoin is also trading below the crucial 200-week moving average for over seven days, meaning that a bearish environment will most likely be the case in September.
As a result, Solana could find itself retesting the June low of $25.86. If this level fails, the next level of macro support is the $20 psychological price level.
A reversal of the trend for Solana, Bitcoin, and the crypto markets is very dependent on when Chairman Powell decides to stop increasing interest rates and potentially start reducing them in what is known as a pivot. Such a scenario will likely materialize in early 2023, given that inflation is still high at the 8% range.
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