SOL Coin has fallen to $145, experiencing a daily loss exceeding 6%. The losses are related to the decline in BTC, which generally affects the appetite for risk in altcoins, leading investors to reduce their risks in altcoins as they fear deeper dips below $60,000. What is the current situation for SOL Coin?
Solana (SOL)
The price reached a local peak of $160 but has melted down nearly 10% due to Bitcoin’s losses. The total value locked in the network has also declined simultaneously with the rise in the DXY index. The Fed is keeping interest rates at the peak, and as signals emerge that it may no longer succeed in combating inflation, risk markets are negatively affected. On the other hand, the SEC’s ongoing battle against the Ethereum ecosystem indicates that Solana may soon face similar challenges.
Yesterday, an announcement from the FTX front stated that they are capable of compensating all victims. The bankruptcy committee aims to make payments based on prices on the day of bankruptcy, which has drawn the ire of victims and also caused a drop in the price of SOL Coin.
The company will have about $16.3 billion in cash for distribution when it completes the sale of all its assets. Since 34% of the bankrupt company’s assets are directly linked to Solana, they maximized benefits from the recent market surge. FTX released these SOL assets for sale at a discount to provide funds for compensating its customers. Several deals were made, and in April, 66% of the assets were sold to Galaxy Trading, Pantera Capital, and Neptune Digital Assets at a 63% discount from the current price.
SOL Coin Price Prediction
The dollar index is the easiest way to understand what is happening on the macroeconomic front. If the index rises, it generally indicates adverse conditions for cryptocurrencies. The DXY climbed from 104.52 to 105.64 in three days, a 1% increase, reflecting potential for further rises and suggesting that incoming economic data will continue to pressure risk assets.
As of May 8, the -0.75 30-day average correlation between DXY and SOL/USD clearly shows their inverse relationship. Recent hawkish comments by Minneapolis Fed President Neel Kashkari indicate that weakness (at best) will continue in the short term.
Although the cup and handle formation in the chart points to a 40% increase to $205, if BTC continues to remain weak, SOL Coin could face a risk of dropping to $107.
