Solana Price Prediction: Key Levels to Watch as SOL Dips Near $160

Solana (SOL) has gone down by 8% in the past 24 hours and is nearing the $160 mark as the crypto market keeps plummeting following last week’s FOMC meeting.

Although the Fed cut interest rates by 25 basis points, as the market expected, the Chairman of the U.S. central bank, Jerome Powell, emphasized that he was unsure if the FOMC would lower rates again in December.

The odds of that cut stood at 91% ahead of the meeting and quickly dropped to 67% after Powell’s comments, as per data from FedWatch. This prompted a shift in the market’s perceived trajectory for financial assets, and impacted risky assets the most – e.g. cryptocurrencies.

The price of SOL has been dropping sharply in the past 30 days, losing 30% already during this period. The token is the only one in the top 5 with a negative performance this year, booking a 15% year-to-date loss.

In contrast, Ethereum (ETH) and BNB Coin (BNB) have made new all-time highs during the cycle, underscoring that investors may see some weaknesses in Solana’s growth story compared to its rivals.

Solana ETFs Bring In $750M in Assets Amid Attractive Staking Yields

Recently, a new Solana spot exchange-traded fund (ETF) hit the U.S. market. The Bitwise Solana Staking ETF (BSOL) offers a 7.3% annual percentage yield (APY) to investors through its staking feature.

BSOL ETF Staking Rewards – Source: Bitwise Website

Its assets under management have surged to $420 million, holding 2.54 million SOL tokens in total. If SOL recovers to $200 at some point, these AUMs would be valued at around, $508 million.

Paired with the REX-Osprey Solana + Staking ETF (SSK), which was launched earlier this year, Solana ETFs have surpassed the $750 million mark in assets.

The reason why Solana has struggled to reach an all-time high seems obvious when one looks at on-chain data. Network activity has been on a downtrend, as reflected by a steady drop in its daily active users (DAUs).

This metric peaked in January amid the launch of popular meme coins like Official Trump (TRUMP), and has been progressively declining from around 8 million back then to 3.4 million at the time of writing.

Most meme coins have performed negatively this year. Although a handful of Solana-based tokens delivered strong gains at some point, they have been shunned by market participants once again.

The network relies heavily on meme coin trading. Hence, if this segment is going through a tough time, its bad performance will negatively impact the performance of SOL.

SOL Could Drop to $125 If The Downtrend Accelerates

The daily price chart shows that SOL broke and retested its long-dated uptrend in mid-October and has been declining since then.

SOL/USD Daily Chart (Coinbase) – Source: TradingView

The price has reached a key support level at $160 and could bounce off it as market conditions remain favorable for cryptos.

Multiple tailwinds, including increased institutional interest, a high APY offered by both on-chain and off-chain Solana staking products, and the launch of large-sized SOL treasuries, favor a bullish outlook for the token.

This does not mean that the price will not drop any further, but institutional players may step in to scoop up tokens at these discounted prices if they believe that the network’s future is still bright.

For now, momentum favors bears as the Relative Strength Index (RSI) is nearing oversold territory. This increases the odds of a recovery but also highlights the strength of the latest downtrend.

If SOL fails to stay above $160, we could witness a move toward $145 next, and much lower, to $125 possibly, if negative momentum accelerates.