- Solana saw bulls charging on Monday with a 10% gain on the docket.
- SOL price reverses earlier gains as US dollar pressure recommences.
- The risk of a domino effect with EUR/USD breaking below parity could trigger a 47% nosedive move.
Solana price made a solid recovery on Monday on what looked to be another soft patch week with risk across the board. Tuesday is turning out to be a whole other thing, with the US coming out of a three-day weekend, and hedge funds having jumped on comments from ECB hawk Nagel that confirm there is a division within the ECB on tackling inflation and monetary control. With one of the biggest central banks losing control of its monetary stance, a seismic shift is happening with investments shifting away from the euro and moving into US dollars, which is also weighing on cryptocurrencies.
SOL traders are outpaced by the dollar yet again
Solana price was set to pop above the longer-term orange ascending trendline and finally tie up again with $40.00. Instead, events took a turn for the worse as US hedge funds corned the FX market this morning and pushed through a massive amount of dollar demand. By doing so, the US dollar strengthened across the board against almost any other asset, dragging cryptocurrencies along for the ride.
SOL price turned out to be no match for the violent motion, and with EUR/USD at 20 year low, the risk is that once the main currency pair falls below parity, a shock could go through the markets, materialize in a massive flow of sell orders and more demand for US dollars. Solana price would initially drop back to the low of 2022, around $26.00, before nosediving towards $18.66. That last level is historically significant and goes back to February 24, 2021.
SOL/USD daily chart
As long as Solana price action can refrain from printing a new weekly low, price action could still surprise the upside. Bulls would jump on the short-term trend continuation and try to break above the orange ascending trend line. From there, the previously projected $40.00 target would come into play again with a 17% uptrend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
Bitcoin likely to remain in red through the next quarter if history is any indication
Bitcoin (BTC) price produced a monthly close at $27,210, noting a -6.92% return for May. The last-minute slide in BTC put an end to the four-month bullish streak that kickstarted the 2023 rally.
Ethereum vs. SEC: Implications of Wahis’ insider trading settlement on ETH
Ethereum (ETH) is the subject of a new controversy, with the second-largest crypto finding itself in the rut after the United States Securities and Exchange Commission (SEC) settled its insider trading case against the Wahi brothers.
Justin Sun’s TRON hits all-time high of 10.9M daily transactions, braving crypto winter
Justin Sun, the founder of TRON – one of the largest decentralized blockchain DAO ecosystems in crypto – shared a new milestone for the token on Thursday. TRON processed 10.9 million in daily transactions, hitting a record high.
Ethereum fees decline by 70% from 2023 highs as top DeFi protocols lose users
Ethereum is currently facing trouble in the spot market due to the broader market bearishness as well as investors' skepticism. But while the spot market only recently took a turn for the worse, the DeFi space has been only negative for a long time.
Bitcoin: BTC delays inevitable crash to $25,000
Bitcoin price is delaying a crash that has been brewing for roughly two weeks. A failure to push higher could result in a steep correction next week. The troubling macroeconomic conditions could be key in catalyzing and trigger a nosedive for BTC holders.