Altcoins
US Jobs Figures Negatively Impact Altcoin Prices; Solana (SOL) Price Analysis
The cryptocurrency market faced significant losses on Friday, with Bitcoin falling below the crucial $55,000 support level, leading to widespread declines across the sector.
Altcoins such as Solana (SOL), Ethena (ENA), and EOS have seen a sharp decline, each dropping more than 10% in 24 hours. As a result, the total market capitalization of all cryptocurrencies has fallen from its year-to-date high of $2.7 trillion to $2 trillion.
The decline in cryptocurrency prices was further compounded by the release of strong U.S. nonfarm payrolls (NFP) data. The Bureau of Labor Statistics reported that the economy added 206,000 jobs in June, beating the 191,000 expected. The figure also beat Wednesday’s ADP report, which showed that the private sector added 150,000 jobs in July.
The report also highlights steady wage growth in June, with average hourly earnings up 3.9% year-over-year. However, not all indicators are positive: the unemployment rate edged up to 4.1% in June, from 4.0% in May. Despite the slight increase in unemployment, the labor market is in robust health, with more than 1.57 million jobs created this year.
SOL, ENA and EOS prices. Source: TradingView
Federal Reserve’s Stance on Interest Rates Amid Steady Inflation
The latest employment figures indicate that the Federal Reserve is unlikely to rush to cut interest rates as inflation remains relatively stable. Recent data showed a slight deceleration in the consumer price index (CPI) to 3.3% in May, while the personal consumption expenditures (PCE) index held steady at 2.5%.
Fed Chairman Jerome Powell recently said that more evidence of declining inflation is needed. Additionally, minutes from the Fed’s last meeting suggest a potential rate cut later this year, perhaps in December.
In this context, the Federal Reserve’s firm stance should put additional pressure on risk assets, particularly cryptocurrencies such as Ethena, Solana, EOS, and Bitcoin. This development coincides with the various challenges these digital currencies are facing. For example, Bitcoin has fallen below the critical support level in its double top pattern, signaling potential further declines.
Adding to market uncertainties, Germany has started liquidating its Bitcoin holdingswhich has led to an increase in balances on cryptocurrency exchanges. Additionally, wallets linked to the infamous Mt. Gox incident have been active, moving their coins, which could influence market dynamics.
Political factors in the United States could also play a role in the trajectory of the cryptocurrency market. Speculation is rife that President Joe Biden may not seek reelection, paving the way for a younger candidate who could have a better chance against Donald Trump in the upcoming election. Trump is generally considered more supportive of the cryptocurrency sector.
In light of these technical and fundamental challenges, the short-term outlook for cryptocurrencies remains bearish, with the potential for further declines in their value.
How is Solana doing? Solana (SOL) Price Analysis
The 9-day exponential moving average (EMA), represented by a blue line and currently positioned at around $141.27, is essential for assessing Solana’s short-term trend. With Solana’s price fluctuating below this EMA, there is an indication of potential bearish sentiment in the market, making the EMA a significant resistance barrier that challenges upward moves.
In terms of momentum, the Relative Strength Index (RSI), shown in light purple, has risen to around 60.11 after rising from lower values. This entry into the “60” territory signals increasing buying momentum, although it remains below the overbought marker of 70, which generally suggests the likelihood of a market pullback.
Recent business trends for Solana The charts show a series of peaks and troughs, with the price on an upward trajectory after a substantial decline. This recovery is characterized by a rise from a low of around $131.24, testing the strength of existing support levels. The price has risen to around $133.30, marking a promising trend, but a decisive break above the EMA is still needed to firmly establish a reversal of the current downtrend.
Main support and resistance areas
The main support for the asset in question is currently identified around $131.24. This level has proven to be an important floor, as evidenced by a recent price drop during which a bounce occurred, suggesting that this area is where buyers typically step in, creating upward pressure. A break below this level could lead to further price declines, making it a crucial point for traders to watch.
If the primary support is compromised, the secondary support near $128.00 becomes relevant. This level, marked by previous instances where the price found stability after declines, could serve as additional protection against downtrends, providing a potential junction for price recovery.
On the resistance side, the immediate hurdle lies at around $141.27, in line with the 9-day exponential moving average (EMA). This EMA currently represents dynamic resistance, with the price often struggling to sustain breaks above this level, indicating persistent selling pressure. Breaking above this barrier could signal a change in the bullish trend, suggesting that the market may be ready to gain upward momentum.
Further up, strong resistance is expected around $144.00. If the asset breaks above the EMA, this subsequent level has historically acted as a significant ceiling, with price highs often followed by pullbacks. A breakout here could denote an escalation in buyer dominance, potentially paving the way for an extended uptrend.