Key takeaways
- Solana (SOL) has declined 9% over the past seven days as US political uncertainty and growing expectations of tighter monetary policy weigh on cryptocurrency markets.
- CME FedWatch data cited in the report shows the probability of a December Federal Reserve rate hike jumping from 84% to 99%.
- SOL risks falling toward $74 or lower if the $80 support region fails, although an oversold Relative Strength Index (RSI) near 25 suggests a temporary recovery remains possible.
Solana (SOL) remains under significant selling pressure after losing approximately 9% of its value over the past week, with deteriorating market sentiment and weakening network activity raising concerns about further losses.
The cryptocurrency is approaching the important $80 support region as investors respond to rising expectations of a Federal Reserve interest rate hike in December.
Recent comments from Fed Governor Christopher Waller have reinforced expectations of tighter monetary policy, with the probability of a rate increase climbing to 99%, according to CME FedWatch figures cited in the report.
Fed rate-hike expectations jump to 99% after Waller’s comments
Expectations of tighter US monetary policy have intensified following hawkish remarks from Federal Reserve Governor Christopher Waller.
Speaking at a conference hosted by the Bank of England, Waller expressed support for another interest rate increase at the Federal Open Market Committee’s December meeting.
He indicated that even if inflation conditions improved compared with September, he would still favor raising the federal funds rate by 25 basis points.
Waller also suggested that more aggressive action could be necessary if inflation exceeded his expectations substantially.
The comments prompted a sharp adjustment in market expectations. According to CME Group’s FedWatch Tool figures cited in the report, the probability of a December rate hike increased from 84% the previous day to approximately 99%.
The shift suggests that traders increasingly expect the Federal Reserve to maintain a restrictive monetary policy stance.
For cryptocurrencies, higher interest rates can create a challenging investment environment.
Solana price forecast: SOL risks falling to $74 if $80 support breaks
Solana’s technical outlook remains bearish as the cryptocurrency approaches an important support region around $80.
On the daily chart, SOL is nearing a fair value gap (FVG) formed during the August rally. For Solana, the current FVG could provide an important demand zone where buyers attempt to defend the cryptocurrency.
However, a decisive breakdown below the support region would weaken the technical structure further.
If SOL fails to stabilize around $80, the next significant downside target stands near $74. A sustained move below this level could expose the cryptocurrency to additional losses, although the supplied analysis does not identify a confirmed lower support target.
Momentum indicators also suggest that bearish pressure has intensified. The daily Relative Strength Index (RSI) has declined to approximately 23, placing Solana firmly in oversold territory.
An RSI below 30 generally indicates that selling momentum has become stretched, potentially increasing the likelihood of a temporary rebound.
Despite the prevailing bearish conditions, Solana’s oversold momentum readings suggest that buyers could attempt a recovery near the current support region.
The $80 area remains particularly important because it coincides with a fair value gap that could attract buying interest.
A successful defense of this region could encourage a short-term rebound, potentially allowing SOL to recover toward its nearest significant resistance around $95.
Conversely, failure to defend $80 would increase the likelihood of a decline toward $74.
