Sol Rebounds Alongside Wider Crypto Market Bounce: Is $160 Possible?
SOL price rallied to $140, but weak derivatives market metrics and stagnate network fees show limited investor confidence. Is a retest of the $160 possible?
Solana’s activity growth has not offset falling leverage demand and weak network fees, keeping SOL short-term bullish prospects limited.
A short squeeze to $160 needs firmer derivatives support and stronger investor conviction amid persistent macroeconomic uncertainty.
Solana’s native token SOL (SOL) failed to reclaim $140 on Monday despite recovering part of its recent losses. A negative funding rate in SOL perpetual futures and declining onchain activity across the Solana network continued to weigh on investor sentiment.
SOL remains down 30% over the past 30 days, underperforming the broader altcoin market. Traders are now assessing the likelihood of a sustainable bullish trend.
Much of the prevailing concern among cryptocurrency investors stems from declining confidence in the United States economy, following signs of labor-market weakness and an increasing reliance on artificial intelligence investments.
The CEO of Deutsche Bank’s DWS asset manager told Reuters that there is “no playbook” for valuing the AI sector, adding that more evidence is required beyond efficiency gains to support elevated valuations.
After a record 43-day US government funding shutdown, several consumer companies reduced sales expectations following weaker-than-anticipated earnings, including Target, Home Depot and McDonald’s.
With the release of the US October Consumer Price Index (CPI) and unemployment data canceled, traders had even less visibility regarding the Federal Reserve’s monetary policy decision scheduled for Dec. 10.
SOL’s weakness reflects a broader decline in risk appetite, but additional factors likely contributed to its underperformance relative to major altcoins. The successful launch of XRP (XRP) exchange-traded funds (ETFs) in the US increased competition for institutional flows, and launches tied to other cryptocurrencies, including Litecoin (LTC) and Chainlink (LINK), are expected to follow.
Source: CoinTelegraph
