Solana below Psychologically Important Level as Bears Control Market
Solana is down drastically as the bears take hold of the crypto market and the long downward trend continues.
Quick overview
- The cryptocurrency market is experiencing a bearish trend, with Solana (SOL) dropping below $100 for the first time in over a year.
- Solana's price has decreased by more than 7% in the last 24 hours, reflecting a loss of investor confidence amid extensive liquidations.
- Economic factors, including a hawkish Federal Reserve pick, are contributing to a shift in investor focus away from volatile digital assets.
- The ongoing decline in Solana's value suggests that recovery may be difficult, as low investor confidence is likely to persist.
The cryptocurrency market is trending bearish with weeks of downward movement that has pushed Solana (SOL) below $100.
Solana has been caught up in the wider cryptocurrency market trend that is causing billions of dollars in losses. Bitcoin (BTC) is below $70K and Solana is now down to $83.60 (SOL/USD).
SOL/USDThe Solana rate has dropped more than 7% over the last 24 hours and is well below the psychologically important $100 level. That means that investor support could dry up as coin holders panic.
Lengthy Liquidations Create Strong Bear Market for Solana
For months, the bears have been pulling not just Solana down but also the wider cryptocurrency market. Investors have lost confidence in digital coins, and Solana has suffered from tremendous, extended liquidations. Short-term and long-term investors alike have bailed on Solana for weeks, getting rid of primarily coins purchased in the last 12 months but also those purchased earlier as the market continues a lengthy bear trend.
The weeks of decline could lead to buyers stepping in turning things around for Solana. There was supposed to be a bullish divergence near $96, according to Chaikin Money Flow, but the Solana rate fell much too quickly for that to happen at the $96 level, and now SOL is priced lower than it has been in over a year.
The low price could be attractive for buyers, but the lengthy decline points to a problem that may not be solved by a few whales stepping in to buy up large masses of Solana. The coin has reached a critical juncture where now spot ETF outflows are above $2.45 million for the first time, and investors have lost faith in the coin and the larger market.
Economic factors are certainly at work here, with one of the strongest factors being President Donald Trump’s hawkish pick for the Federal Reserve in Kevin Warsh. Investors are losing faith in digital tokens and are looking for less volatile assets to invest in. The stock market indices remain close to all-time highs, indicating that the problem is not solely the economy but is, in part, a problem with the crypto market.
Solana is not stuck in a temporary bear trend that could simply reverse anytime soon. Instead, it is part of a long trend that is affecting the entire market and that will likely persist for weeks to come, at the very least. Even if Solana manages to make some recovery, it will have trouble holding onto its gains with such low investor confidence plaguing the market.
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