Solana probably has a bright future, but we need to see this market stabilize enough to turn around a break above the $150 level to bring in a bit more in the way of confidence.
Solana has had another negative session during the trading session on Monday, losing over 3%. That being said, we are starting to see a little bit of hesitation as we reached towards the 200 day EMA which currently sits at $122.91 just below. Whether or not it holds is a completely different question, but it is worth noting that there was a significant pullback towards that area back in September 2021, so it will be interesting to see if we get support there.
If that area does not offer support, it could be extraordinarily bearish for this market, perhaps opening up a move down to the $85 level. Quite frankly, that would be a significant fall again, but at this point in time the crypto markets are in deep trouble. They seem to be trying to fight in that general vicinity that we find most of the major coins in, but whether or not they can hold is a completely different question. After all, most of what you are seeing in the crypto markets goes well beyond crypto itself.
As the Federal Reserve is looking to tighten monetary policy, investors and traders are looking for liquidity, meaning that they are selling anything that is remotely alpha related. They start to look for beta related plays, meaning things like gold, boring stocks that people tend to ignore, and to a lesser extent, fixed income. In other words, it is not exactly the economic situation that you typically see crypto do well in.
All of that being said, it does look like Solana is trying to stabilize in this general vicinity, and perhaps more importantly, Ethereum looks as if it is trying to do the same. Remember, Solana is supposed to be a “Ethereum killer”, but it has a long way to go before it can actually replace Ethereum itself. Ultimately, Solana probably has a bright future, but we need to see this market stabilize enough to turn around a break above the $150 level to bring in a bit more in the way of confidence. Whether or not we can get that is a completely different question, but I would not be surprised at all. As with most things crypto related, you probably need Bitcoin to turn around and rally as it will drag the rest of the space right along with it.