Solana’s (SOL-USD) price took a nosedive, falling over 6.25% to hit around $194.50. The drop coincided with a broader crypto market sell-off triggered by U.S. Federal Reserve Chairman Jerome Powell’s latest remarks. During his testimony before the Senate Banking Committee on February 11, Powell maintained a hawkish stance on interest rates. This has caused many investors to shy away from riskier assets like cryptocurrencies.
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Fed’s Hawkish Tone Rattles Crypto
Powell’s recent comments put a spotlight on the Fed’s careful stance on rate cuts. He pointed out the robust health of the U.S. economy and warned against tweaking monetary policy too quickly. Following his speech, there was a noticeable rise in both short and long-term Treasury bond yields. This change made traditional assets more attractive than riskier options like Solana. With everyone keeping a close eye on the Fed’s next moves, the CME FedWatch tool now indicates a 95.50% chance that interest rates will remain unchanged in March, putting a damper on the crypto market’s mood.
Solana Could Face a Steep Drop
Technical patterns are also not in Solana’s favor. The cryptocurrency is currently forming the right shoulder of a head-and-shoulders pattern, a classic bearish indicator. If Solana breaks below the neckline support at $180.50, it could potentially plummet by another 40% to around $109.21. If Solana manages to stay above this key support level, it could set the stage for a rally back up to $215, which would challenge the current bearish outlook.
Long-Term Optimism Remains
Despite the current turbulence, some industry insiders are still optimistic about Solana’s future. Mert Mumtaz, CEO of Helius Labs, is firmly confident in Solana’s potential, predicting a 150% increase over the next five years.
Speaking to Hall of Flame, Mumtaz stated, “I’m confident in saying that Solana will be a trillion-dollar asset and that it will go above $500. I’d be very surprised if Solana is not at $500 in five years.” His long-term perspective demonstrates the underlying strength he sees in Solana, despite short-term market fluctuations.
At the time of writing, Solana is sitting at $196.44.
