Solana Price News: SOL Eyes Drop to $50 as FED Hike Is on the Table

Solana (SOL) has taken a big hit in the past 24 hours, dropping by 6.5%, following yesterday’s interest rate decision by the Federal Reserve.

This was the first time that the market heard the Committee’s decision from Kevin Warsh’s mouth.

The new head of the Fed emphasized that he sees inflation as a “choice”, which the market seems to be interpreting as a sign that he is willing to do what it takes to prevent prices from spiraling out of control.

In addition, he abstained from providing guidance on interest rates, as he believes that this is not useful in any way to accomplish the Fed’s dual mandate of achieving price stability and fostering economic growth.

“Absent, also, is so-called forward guidance, which we agreed was not well suited to the current policy conjuncture,” Warsh clarified about this matter.

Analysts Now Expect a 50bps Rate Hike by September

Today’s price action confirms this view, as prices are dropping hard as market participants have increased the odds of a rate increase this year and even see high odds of a 50bps hike.

Data from the CME Group’s FedWatch shows that analysts now give a 70% chance of a rate hike in September and a one-in-three chance of a 50 bps increase.

This means a significant turn of events compared to earlier this year, when the baseline scenario was that the Fed was going to cut rates at least twice in 2026. This shift explains the market’s latest downturn and sets the stage for a spike in bearish momentum.

SOL Experiences Strong Selling Pressure at $75

We have been tracking Solana’s price action recently and expected a retest of the $78 level from below. The price action got close to this mark, but started to retreat before that, right after the token hit $75.

Paired with a deterioration in the macroeconomic backdrop, we see this reversal as an early indication of the beginning of another leg down for SOL that could push the token to $50.

In this higher time frame, the Relative Strength Index (RSI) was just coming out of oversold levels. Hence, this latest bounce was expected, but it did not provide the necessary evidence to consider it a true recovery.

That extreme oversold reading could actually be interpreted as confirmation that bearish momentum is accelerating.

Sell Signals Light Up in the 4H Chart

Moving down to the 4-hour chart, we got a sell signal yesterday as Warsh gave his first speech. Since this signal is popping up near a key level, we see a short position at this point as a high-probability setup.

Our signals system tracks a specific candle pattern that is accompanied by above-average trading volumes. The last time we got a similar signal was in early June, when the price plummeted from $76 to $60 for a 21% drop.

Also, the Relative Strength Index (RSI) in this daily chart has dropped to 40, which is typically the “sell” signal for this indicator.

To fully take advantage of this potential drop, we would have to wait for the price to bounce back to $70 and use that as our entry. In that scenario, a drop to $50 would mean a 3x risk-reward ratio if the stop price is set at around 76.