Solana sold off sharply on Thursday as the rout
in technology stocks triggered a risk-off move across financial markets. The
deterioration in sentiment spilled over into crypto, with traders reassessing
the implications of the Democratic sweep for the US economic outlook.
A Democratic Congress is expected to favour
greater fiscal restraint and tighter regulation, limiting investment in AI
infrastructure. Given how heavily US growth has become reliant on AI-related
spending, any slowdown in this investment cycle could have significant
consequences for the broader economy.
At the same time, the election outcome does not
prevent Trump from imposing tariffs or continuing military operations against
Iran. This leaves the US growth outlook exposed to several downside risks, with
an end to the Iran war representing the only possible relief to the growth outlook.
Tomorrow’s US CPI report will be the next major
macro catalyst. The data could influence expectations for the December FOMC
meeting, with markets already pricing in a high probability of another rate
hike. A hot report could trigger a hawkish repricing and put renewed pressure
on Solana. Soft data, on the other hand, could provide some short-term relief,
although it wouldn’t reverse the main trend.
SOLANA TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that Solanabroke below the major upward trendline. This has opened the door for
a drop into the 74.00 handle. The sellers will likely continue to lean on the
downward trendline, with a defined risk above it, to keep targeting new lows.
The buyers, on the other hand, will want to see the price breaking above the
trendline to position for a rally into the 149.00 level next.
SOLANA TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have a minor downward
trendline defining the bearish momentum on this timeframe. The sellers will
likely lean on the trendline, with a defined risk above it, to keep pushing
into new lows. The buyers, on the other hand, will look for a break higher to
pile in for a rally into new highs, with the major downward trendline as the
first target.
SOLANA TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will have a better risk to reward setup
around the trendline, while the buyers will need a break to open the door for
new highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US CPI report. On Thursday, we get the latest US Jobless
Claims figures. On Friday, we conclude the week with the US PPI data.
This article was written by Giuseppe Dellamotta at investinglive.com.