Solana (SOL) faces further price collapse despite rate cuts by the Federal Reserve. According to CoinGecko, SOL’s price has fallen nearly 6% in the past 24 hours, 9.1% in the last week, 8.2% on the 14-day chart, and nearly 21% in the last month. Solana (SOL) was one of the best-performing cryptocurrencies in 2024, but the asset’s price has fallen by more than 40% since December 2024. Let’s discuss why SOL’s price has crashed and whether crypto winter is coming.
Why did Solana crash? Will she recover?
Solana (SOL)’s decline occurred amidst a market-wide price correction. Bitcoin (BTC) briefly fell to the $89,000 level earlier today. According to CoinGlass, the cryptocurrency market recorded more than $500 million in liquidations in the past 24 hours. The market correction is surprising given that the Federal Reserve has cut interest rates by an additional 25 basis points (bp).
Solana (SOL) price correction could be due to growing macroeconomic uncertainty. Investors may have continued their risk-averse strategy following the employment data. Moreover, further rate cuts are highly unlikely in the near future. Slower economic growth and employment numbers are likely steering investors away from risky assets like Solana (SOL) and other cryptocurrencies.
We may be entering a new crypto winter. But the current lackluster market need not scare Solana (SOL) investors. SOL has proven to be one of the most resilient crypto assets on the market. After the collapse of FTX, SOL price fell below $9 in 2022. However, SOL has hit multiple all-time highs since its 2022 low. The asset reached its most recent high of $293 in January earlier this year. Although the current market woes are alarming, SOL is likely to recover in price soon.