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Solana’s price plummeted 25% since July 19 high of $44.37. The Ethereum-killer is struggling to recoup its losses and make a complete recovery amidst bear market woes. Further correction is likely in Solana; the altcoin could witness an extended downtrend, revisiting support at $31.77 and $29.59.
Cryptocurrencies in the top 30 by market capitalization witnessed a steep decline in prices as the macroeconomic outlook remains negative. Traders are risk-averse and are pulling capital out of cryptocurrencies. The “Merge trade” trend has faded out as futures trading racked up $88 million in losses in Solana’s top competitor — Ethereum. While Ethereum slid nearly 9%, Solana posted a 15% decline over the past two weeks. Senior market analysts have predicted a prolonged snoozefest that fits into historical patterns.
Typically, in response to the Federal Reserve’s rate hike announcement, cryptocurrencies witness a drawdown, and prices plummet. Recovery is attempted a few hours post the announcement, and it is priced in within two to three days. If history repeats, the price of Solana could witness a continuation of the downtrend and attempt a recovery after sweeping support at $29.59.
However, bulls continue to wrestle the bears and push Solana’s price higher. If the token’s price flips resistance at $41.05, it crosses the 50-day EMA. This makes a trend reversal likely, and Solana could witness a massive rally to the bullish target of $78.02.
Currently, there are no meaningful growth drivers in Solana’s ecosystem or the wider crypto market, under the weight of the Federal Reserve’s rate hike decision. However, this could change by the end of the week. If a clear buy signal emerges in Bitcoin, a rally in the asset could push Solana prices higher by correlation.
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