- Solana’s native token, SOL, has seen a decline of 9.8% over the past two weeks.
- The cryptocurrency market has been under pressure due to the U.S. Federal Reserve’s decision to keep interest rates unchanged.
- Investors are concerned about the impact on regional banks and the potential contagion risk.
Solana’s Performance and Market Pressure:
Solana’s native token, SOL, has experienced a decline of 9.8% in the past two weeks, failing to break above the $104 resistance level. This underperformance raises questions among investors, especially considering Solana’s strong network fundamentals. However, it’s important to note that the broader cryptocurrency market has been under pressure since the U.S. Federal Reserve’s decision to keep interest rates unchanged. This decision has created concerns about regional banks’ fixed-income portfolios yielding below the current interest rate.
Contagion Risks and Investor Concerns:
The crisis in U.S. regional banks, exacerbated by their fixed-income portfolios’ low yields, has caught the attention of traders and investors. Shares of New York Community Bancorp, which purchased the collapsed crypto-friendly Signature Bank, have dropped 42% since reporting a $260 million loss in the fourth quarter of 2023. The contagion risk arising from this situation has added to investor concerns.
While Solana’s price decline may be influenced by broader market factors, such as the U.S. Federal Reserve’s decision and concerns over regional banks, it’s important to consider Solana’s network fundamentals. Increased user activity on the network suggests there is still strong interest and adoption of Solana’s technology. Investors should evaluate the long-term potential of Solana beyond short-term price fluctuations.