Solana bounced ever so slightly during the session on Tuesday as the $80 level has offered significant support previously and showed itself to be relevant again. That being said, it is a very slight bounce, and it certainly looks as if crypto in general is in a lot of trouble. This is going to be especially true if the Federal Reserve continues to tighten into a slowing down economy, which we are already starting to see some signs of. In this environment, it is difficult to imagine that a lot of money is going to go out on the risk curve, and Solana is most certainly out there.
If we do get a little bit of a bounce from here, I suspect that somewhere near the $100 level there should be a certain amount of selling pressure, and most certainly by the time we get to the $120 level will come into the picture as well. The 200 day EMA currently sits at the $120 level, and the 50 day EMA is likely to go looking towards the 200 day EMA and perhaps even break down below there to give the “death cross” signal that a lot of longer-term traders will pay attention to.
Remember, Solana is a very promising coin, but it is also further out on the risk spectrum than Bitcoin. Because of this, it is difficult to imagine a scenario where that suddenly takes off without a lot of help from one of those markets. Ultimately, I think what we have got here is a situation where Solana will follow right along with the rest of the risk assets around the world that are hurting. The commodity markets have done relatively well, mainly due to the fact that inflation is an issue. However, inflation looks likely to have peaked, and with the Federal Reserve tightening monetary policy into that scenario, this is going to work against risk appetite. Quite frankly, I would not be surprised at all to see this market break down below the $80 level and go looking towards the $50 level next. I believe that the market could go even lower than that due to the fact that we may be heading into a “crypto winter.” With that being said, Solana has a bright future, but it is probably a market that will offer you much better prices.
