Solana Price Warning: SOL Faces $109 Resistance, 10% Correction Risk Ahead?

Warning Solana (SOL) investors: the asset is facing a critical resistance wall at $109, and data suggests a potential 10% correction could be imminent. After a stunning rally that saw SOL breach the $100 mark and ride Bitcoin's (BTC) wave to an $80,000 high, the market is now cooling off. BTC has already retraced to the $77,000 level, and SOL is following suit. CoinGecko data confirms the pullback, with SOL down 3.4% in the last 24 hours, despite still being up a remarkable 34.4% over 14 days and over 39% on the monthly chart. The key question now: will the $109 ceiling trigger a short-term plunge, or is this just a pause before the next leg up?

Solana’s Price Facing Strong Resistance: Where To Next?

Solana’s (SOL) recent rally came after two specific events. Firstly, President Donald Trump hosted a cryptocurrency event at the White House. During the event, Trump stated that the US plans on purchasing a large amount of Bitcoin (BTC) and other cryptocurrencies. The statement may have elevated investor sentiment.

Another event that may have propelled Solana’s (SOL) price is the US Treasury’s decision to increased bond buybacks to nearly $4 billion. The move may have led to increased liquidity flowing into the cryptocurrency market.

However, the cryptocurrency market upswing seems to have slowed down. Solana (SOL) has fallen to just above $102, and Bitcoin (BTC) has dipped to the $77,000-$78,000 range. Chances are high that the cryptocurrency market will face further challenges.

Firstly, Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole meeting was rather hawkish. He particularly highlighted inflation risks. Market participants anticipate the Federal Reserve to raise rates later this month. CME FedWatch data shows that there is a near 60% chance of a 25 basis point interest rate hike. Solana (SOL) and other cryptocurrencies could suffer if rates go up.

Secondly, the liquidity from the US Treasury bond buy backs will eventually have to be returned. A liquidity reversal could lead to a market-wide correction for the cryptocurrency sector.