Solana (SOL) has booked a 9% drop in the past 7 days, following the victory of the Democratic party in the U.S. mid-term elections.
Sentiment has leaned toward the bearish end, as full control of the House of Representatives and the Senate by the Democrats will likely mean scarce to no progress when it comes to passing supporting legislation for the crypto sector.
Meanwhile, odds of a rate hike climbed to nearly 100% today following comments from the U.S. Federal Reserve’s Governor, Christopher Waller, as he emphasized his support for a 25 basis points increase during the next FOMC meeting.
Odds of a Rate Hike Rise to 99% for December
During a conference hosted by the Bank of England, Waller commented: “While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC’s policy rate at our December meeting.”
In addition, he even advocated for more aggressive actions “if inflation comes in substantially higher than I expect.”
Data from FedWatch shows that the odds of a rate hike in December spiked from 84% the day before to 99% as the market probably thinks that this is an opinion shared by other Fed Governors.
Waller’s remarks add fuel to the selling spree that has already been unfolding across the market in the past few days. In just 7 days, over $2.4 billion worth of long positions in the crypto market have been wiped out as a result of the latest decline.
Meanwhile, SOL is currently ranking third in terms of long liquidations in the past 24 hours, with nearly $7 million worth of longs being taken out of circulation as the token is nearing its $80 support.
In this bearish environment, Solana’s on-chain data is pointing to severe weakness within its ecosystem. According to DeFi Llama, DEX volumes have now booked a 6-week streak of declining prints, indicating lower usage.
This metric has dipped from a recent peak of $17.8 billion back in mid-September, when cryptos were rallying to this cycle’s highs, to just $10.8 billion as of last week for a 39.3% retreat.
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These are technical candlestick patterns that tend to hold a significant volume of buy orders and could act as a strong demand zone in the near term.
If the price fails to rebound off that mark, it is highly likely that we will see SOL drop to $74 or lower. Momentum readings have recently sent extremely bearish signals, as the Relative Strength Index (RSI) declined to 25.
The last time this happened was in June 2026. Back then, SOL hit its previous cycle’s low at around $61. Hence, we could expect a technical rebound at some point, especially as the altcoin is approaching this FVG.
However, whether that leads to a strong recovery or just pushes SOL back to its nearest resistance at around $95 will determine if this bull market is over or if we just witnessed a prolonged correction catalyzed by a handful of strong headwinds.