Potential Ethereum killer Solana (SOL) appears to have steadied after a decline earlier in today’s session, but the mood remains mostly bearish amid the ongoing sell-off in the wider cryptocurrency market driven by China’s latest clampdown on activity in this space. At the time of writing, SOL/USDT is trading around $31.

The weakness among cryptocurrencies was driven by the Fed’s unexpected plans to reverse its previous dovish tones sooner, with the latest FOMC statement revealing interest in rate hikes and tapering of asset purchases sooner than previously planned. This not only caused the US dollar to rebound but also sent riskier assets like equities and cryptocurrencies on a downtrend since late last week.

The downbeat mood triggered sharp sell-offs in market leaders Bitcoin and Ethereum, and the fallout effect of this impacted the smaller digital assets as well, including Solana. Bitcoin shares a negative correlation with the US dollar, losing ground whenever the US currency strengthens, as is happening at present.

Meanwhile, there may be some hope for SOL against several of its other peers in this space over emerging reports about leading investment firm Grayscale considering adding this token to its list of offerings in the near future. The company made an announcement late last week sharing a list of 13 digital assets it considers promising and is expected to review their performance to offer them as investment products to Grayscale clients.

Key Levels to Watch

The 4-hour chart of SOL/USDT reveals a strong bearish bias among the moving averages; however, the momentum indicator is suggesting the presence of buyers looming close. The price sits close to the immediate support level at around the $30 mark, which means there could be more of a downtrend coming up soon.

If this level breaks down, we could see Solana’s price fall further to test the next support at around $25. On the other hand, a reversal in the market sentiment could see SOL rise beyond the pivot point to test the key $40 level which is acting as resistance.