- Solana price has rebounded in the past 24 hours.
- It rose after the Federal Reserve hiked rates by 0.75%.
Solana price has done well in the past 24 hours as investors buy the dip. SOL is trading at $34, which is about 32% above the lowest point this week. The price remains 86% below its all-time high, bringing its total market cap to about $$11.5 billion.
Fed hikes interest rates
Solana price is rising even after the Federal Reserve decided to deliver its biggest rate hike in almost three decades.
In a statement on Wednesday, the Federal Reserve decided to hike interest rates by 0.75%, which was the highest increase since 1994.
In a statement, Jerome Powell said that the bank will continue hiking rates in a bid to fight inflation. He expects to hike rates by 0.75% in July. If this happens, it will be the fastest pace of rate hikes in decades.
Historically, volatile assets like cryptocurrencies tend to underperform in a period of high interest rates. This explains why Solana price has tumbled in the past few months.
Solana and other cryptocurrencies have rebounded after the Fed hiked rates. Other assets have also bounced back, with futures tied to Dow Jones and Nasdaq 100 indices rising by over 0.50%. This performance is because the rate hike was priced in.
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Still, Solana is in trouble. The total value locked (TVL) of Solana’s ecosystem has crashed by more than 37% in the past 30 days. It has fallen to about $2.7 billion. A quick look at its ecosystem shows that only 11 apps in its ecosystem have a TVL of over $100 million. They include apps like Solend, Serum, and Marinade Finance.
This performance is in line with that of other blockchain projects like Ethereum, Avalanche, Cronos, Polygon, and Fantom.
Solana is also struggling because of the regular outage in its platform. As a result, many potential developers have opted for other platforms. Meanwhile, the performance of Solana’s Web3 projects like Brave and StepN have all fallen.
Solana price prediction
The SOL price has been in a strong bearish trend for months. It is trading at $33.80, which is above the descending trendline shown in green. The coin remains below the 50-day moving average while the Relative Strength Index (RSI) has moved above the oversold level.
Therefore, there is a possibility that Solana will resume the bearish trend in the coming days. This means that the rebound is a dead cat bounce. If this happens, it will retest this week’s low of $26.36.
