Solana Faces Risk of $90 Line Collapse, Can It Rebound Through Inflation Shock?

▲ Solana (SOL) ©

Solana (SOL) is leading the downward pressure in the altcoin market, with its $90 support level threatened by a deteriorating macro environment following the release of higher-than-expected US inflation data.

According to cryptocurrency market data aggregator CoinMarketCap on May 14 (local time), Solana (SOL) price recorded a significant correction, falling by 3.49% to $91.21 over the past 24 hours, a larger drop than the market average. The decisive reason for this sharp decline was the US April Producer Price Index (PPI), announced on the 13th, which surged by 1.4% month-over-month, nearly triple market expectations. As inflation concerns resurfaced and the possibility of a Federal Reserve (Fed) interest rate hike was discussed, funds rapidly flowed out of risk assets like virtual currencies.

Large-scale liquidations in the futures market also fueled the price decline. Over the past 24 hours, approximately $72.71 million worth of positions were forcibly liquidated across the entire virtual asset market, with about $6.72 million in liquidation sales coming from Solana alone. In particular, positions utilizing excessive leverage were sequentially liquidated during this volatile market, further accelerating the downward momentum.

From a technical perspective, Solana is currently at a critical juncture, testing the psychological threshold of the $90 level. After failing to break the $100 resistance recently, it is now confirming support in the $90-$92 range. If this range breaks down, there is a high risk of further decline to the $86 level, according to Fibonacci retracement levels. Conversely, if it successfully defends $90, it is expected to enter a consolidation phase to reclaim the $95 resistance level.

Moving forward, market attention is focused on the upcoming Consumer Price Index (CPI) data and statements from Federal Reserve officials. If inflation indicators continue to remain high, downward pressure will inevitably intensify, and volatile assets like Solana are expected to react even more sensitively to changes in macro liquidity. Experts diagnose the current short-term trend as pessimistic and advise that recovering the $95 level on a closing basis is paramount for a full-fledged rebound.

In conclusion, Solana is experiencing a dual challenge: macro headwinds due to high inflation shock and deleveraging in the derivatives market. For the time being, a conservative approach seems valid, continuously monitoring the $90 support level and awaiting a recovery in overall market sentiment. Investors should remain cautious, aware of the possibility of an additional 'flash crash' following the release of inflation data.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*