Solana
Solana Price Hits Four-Week Low Amid Macroeconomic Uncertainty
Solana Price Hits Four-Week Low Amid Macroeconomic Uncertainty
Solana (SOL) recently hit a four-week low, testing the $145 support level on June 11. This came after a sharp four-day decline of 15.8%, underperforming the broader cryptocurrency market, which saw a 10% decline in total capitalization over the same period. Despite the slowdown, some indicators suggest that the current macroeconomic instability could present a buying opportunity for SOL.
Investor confidence has been shaken by mixed economic signals, raising concerns about a possible stock market correction. This uncertainty influences expectations regarding interest rate cuts from the US Federal Reserve (Fed). According to the CME FedWatch tool, traders now estimate there is a 48% chance that rates will remain unchanged through September, up from 39% a month ago. The S&P 500 Index, which hit a record high on June 7, has since plateaued as investors eagerly await comments from Fed Chairman Jerome Powell on June 12.
Stuart Kaiser, head of US equity trading strategy at Citigroup, noted that an increase in the Consumer Price Index (CPI) of more than 0.4% from the previous month could trigger a market sell-off. This could potentially lead to a 1.5% to 2.5% decline in the S&P 500. Kaiser also warned that the S&P 500 could see its biggest single-day move since March 2023, US inflation data due to be released on June 12 being a critical factor. factor before the Fed’s rate decision.
SOL’s recent underperformance may also be linked to network issues, particularly around Maximum Extractable Value (MEV). Solana network validators were found to exploit traders via sandwich attacks, manipulating transaction prices for profit at the expense of retail investors. In response, the Solana Foundation excluded these validators from its delegation program, in an effort to reduce incentives for such harmful actions.
Despite the sharp 15% decline, the demand for leverage via SOL futures remains unaffected by the recent market decline. Data from Coinglass shows that SOL’s funding rate has remained stable at 0.01% every eight hours since June 8, which equates to approximately 0.2% per week. This stability of the financing rate, despite a significant drop in prices, demonstrates the resilience of the market. Typically, a large increase in the funding rate suggests that bulls are overleveraged, but this has not been the case for SOL.