The Solana price experienced a 4% decline on Wednesday, approaching the $90 support level amidst a broader market downturn. This downturn was triggered by the release of hotter-than-expected US PPI data, which raised concerns about persistent inflation and the potential delay of Fed rate cuts.
Solana Price Drops Amid Market Downturn
According to data from crypto.news, the price of Solana (SOL) fell to an intraday low of $90.4, reducing its market capitalization to $51.6 billion. The seventh-largest crypto asset by market capitalization slipped after the US Bureau of Labor Statistics released data showing higher-than-expected inflation at the producer level. Notably, PPI rose 0.6% in February, while core PPI rose 0.3%, exceeding economists’ forecasts and signaling continued inflationary pressure.
Impact of US PPI Data on Solana Price
The data comes just ahead of the Federal Reserve’s rate-cutting decision, with the market largely expecting the Fed to keep interest rates steady. The probability of a pause is up to 99% using the CME Fed Watch tool. The Fed is also likely to delay any interest rate cuts this year, particularly given rising oil prices caused by a blockage of the Strait of Hormuz as a result of the US-Iran war. Market pressure increased as investors priced in a likely Fed pause, with rising oil prices and geopolitical tensions contributing to the decline.
Despite the bearish market scenario, there are still some key fundamental metrics that could support Solana’s price performance. Notably, the total stablecoin supply on the Solana network reached a record high of around $15.7 billion earlier this week. A strong stablecoin supply means there is significant collateral capital ready to buy the dip and often precedes a period of high liquidity and buying pressure. Additionally, spot Solana ETFs continued to record consecutive inflows for the sixth week in a row, attracting over $127 million into the funds.
Solana Price Analysis
On the daily chart, Solana price has respected an ascending trend line that has served as dynamic support since early February this year. Technical indicators such as the MACD lines were pointing upwards while the Aroon Up was significantly higher than the Aroon Down at 85.71%. Therefore, Solana price could rise back above the $90 support even if it falls temporarily due to the ongoing market downtrend observed at press time.
SOL/USDT price chart – March 18 | Source: crypto.news
However, a drop below $80, the next key psychological support level, could override the current bullish structure and lead to a deeper correction. At press time, SOL price was at $89, down over 5% on the day.
For more information on the Solana price and its potential rebound, visit https://crypto.news/solana-price-eyes-rebound-from-90-support-as-stablecoin-supply-hits-record-high/
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