 ▲ Solana (SOL)/AI-generated image © |
As geopolitical tensions in the Middle East overlap with inflationary pressures in the United States, risk-off sentiment has spread across the broader cryptocurrency market, with Solana (SOL) breaking below a key support level and facing a sharp decline.
As of Feb. 28 (local time), according to CoinMarketCap, Solana is trading at $79.43, down 5.96% over the past 24 hours, marking a steeper drop than the overall cryptocurrency market. The total crypto market capitalization fell 3.47% during the same period, while Bitcoin (BTC) declined 3.34%. The widespread downturn was triggered by reports of expanded U.S. and Israeli military actions targeting Iran and the release of U.S. Producer Price Index (PPI) data that exceeded market expectations. This dampened expectations for short-term rate cuts by the Federal Reserve and intensified aversion to risk assets.
Technical indicators also clearly highlight Solana’s weakness. The token has broken below both its 7-day and 30-day moving averages at $82.94 and $88.74, respectively. The 14-day Relative Strength Index (RSI) stands at 40.61, signaling oversold momentum but not yet at extreme levels. Notably, a 20.47% surge in 24-hour trading volume to $4.52 billion confirms that large-scale, conviction-driven selling is leading the market decline.
The short-term market direction hinges on whether the key support zone between $75 and $78 can hold. If Solana firmly defends this level and Bitcoin finds stability, a recovery toward the $83 to $85 range could be attempted. However, with CoinMarketCap’s Fear and Greed Index remaining at 14, indicating extreme fear, and macroeconomic uncertainties mounting, the overall trend remains skewed to the downside.
If selling pressure intensifies further and the $75 support level breaks on a daily closing basis, a wave of stop-loss orders could trigger additional sharp declines, potentially driving the price down toward the short-term low of around $67 recorded on Feb. 6. The market is currently in an extremely defensive posture, and within the Solana ecosystem there are no independent bullish catalysts strong enough to offset external macroeconomic pressures.
Ultimately, Solana’s recent decline is the result of a macro-driven risk-off environment combined with a technical breakdown. For altcoins to halt their downward trend and find momentum for a rebound, it is essential for market leader Bitcoin to establish a solid floor above $65,000. Investors should also closely monitor changes in capital flows into U.S. spot exchange-traded funds (ETFs), a key indicator of market sentiment.
*Disclaimer: This article is provided for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted solely for informational purposes.*