Solana (SOL) Price Jumps 10% Following Bullish Fed Announcement
SOL jump 10% from yesterday due to Fed rate cuts rally. Will it be enough to turn its outlook bullish?
Key Takeaways
- Fed cuts rates by 50 basis points on Sept. 18.
- SOL bounced from $120 support, indicating a possible uptrend continuation.
- SOL’s next key resistance level sits near $150.
On Sept. 18, 2024, the Federal Reserve cut interest rates by 50 basis points, lowering the federal funds rate from 4.75% to 5%. This was the first rate cut over four years, surprising many analysts who expected a more modest 25 basis point reduction. The decision came as part of the Fed’s ongoing efforts to support the economy amid slowing job growth and rising inflation risks.
This positively affected the cryptocurrency market, which rose about 5.45% in total market capitalization. Some cryptos benefited more, including Solana (SOL), which increased by 10% from its low yesterday. Also, as our previous analysis was mainly bearish, did this surge change the picture?
Solana Price Analysis
After breaking above descending resistance on July 20, SOL was expected to retrace as a potential confirmation of a bullish trend, provided it could hold above the broken resistance. However, failing to maintain this level suggested that SOL’s corrective structure, which began mid-March, was ongoing, leading to further downside. This decline pushed SOL back to its horizontal support, near $120.
As a descending flat triangle formed, seller pressure increased with each test while buyers held the same level. On Sept. 6, this area was retested again, resulting in a price bounce, leading to its current increase.
Another important factor is that yesterday’s low was higher, indicating the potential start of an uptrend. On the other hand, today’s high of $139 is still slightly lower than its previous one of $140. However, with the positive momentum, more upside will be expected in the short term for yet another interaction with the descending resistance slightly below $150. Will it manage to break it and provide a signal for the starting bull phase?
SOL Price Prediction: More Upside First?
Zooming into the hourly chart, we can see that two possibilities are ahead, but more upside is expected in both. The main question is how the previous upswing from Sept. 6 to 13 is counted.
Either SOL started an uptrend from Sept. 6 or is making a corrective increase before further downside. In the first scenario, stronger momentum will move to the upside, leading to a breakout above the descending resistance.
If this happens and SOL reaches $156 at the 1.618 Fibonacci extension level, another higher high would be expected for the five-wave impulse to complete and strongly confirm the new uptrend.
On the other hand, SOL could be rejected below the $150 area, ending its increase as a corrective one. In that case, we could see the following downturn leading to a breakout below the $120 horizontal support area and on to a lower low of $105.
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