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Solana is among the biggest losers as cryptos bleed amid concerns over the fierce war between Israel and Hamas. The competitive smart contracts token lost 4.2% of its value to trade slightly above $21.
Bitcoin and Ethereum are also in the red, down 1.3 and 1.5% respectively to trade at $26,697 and $1,544. The market capitalization which had rallied above $1.1 trillion early last week due to the excitement surrounding the SEC’s approval of Ether futures exchange-traded funds (ETFs) in the US, has tumbled to $1.08 trillion.
Solana Price Prediction: Can SOL Rebound With This Support?
Solana price is in a risky spot as it balances on the cliff’s edge – the 100-day Exponential Moving Average (EMA) (blue). Following the rejection from resistance at $25 at the beginning of October, it has been a downward spiral.
With the ball in the bears’ court, the bulls must successfully defend the 100-day EMA support at $21.17 to reduce the risk of SOL falling below $20.
The Moving Average Convergence Divergence (MACD) is in support of the bearish outlook after confirming a buy signal in the daily timeframe. As long as the MACD line in blue holds below the signal line in red, the path with the least resistance would stay on the downside.
A break below the immediate support would mark the short sellers’ party who may want to start booking profits at $20. Other key support areas to keep in mind while trading Solana include $17.5 and $15. Beyond this, we could be staring at a similar crash that befell SOL during the FTX implosion in November.
US Inflation Data Catches Solana Off-Guard
The release of the US Consumer Price Index (CPI) is hurting the crypto despite data showing inflation is easing in the greenback nation. According to the report from the Bureau of Labor Statistics (BLS), CPI rose 0.4% in September compared to 0.6% in August—the biggest hike in 14 months.
From the start of the year to September, the CPI increased by 3.7% but the metric on a year-over-year basis revealed that prices have decreased from the 9.1% peak in June 2022.
Economists are already predicting that the Fed will keep interest rates unchanged at the end of the next FOMC meeting on November 1.
John Haar, Swan Bitcoin’s head of private client services said in a statement that “Given the recent move higher in Treasury yields, and recent commentary from Fed officials, it appears that the Fed is likely to keep rates constant at their next meeting on November 1.”
However, the war in the Middle East between Israel and Hamas could negatively impact oil prices which might knock on the core inflation.
There are more macro events and related speeches this week, but they have little impact on the crypto market, which is still mainly going independent.
For example, the release of CPI data today had almost no impact on the market, on the one hand, the data released was in line… pic.twitter.com/HadafgjhsZ— Greeks.live (@GreeksLive) October 12, 2023
For now, traders should be keen on how Solana reacts to support at the 100-day EMA. A break below could trigger a sell-off while an immediate rebound might allow for consolidation before the next move to $25 and $30, respectively.
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