Solana resists bearish pressures coming from failed Clarity Act vote and Fed rate hike. What's next?

<p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;">FUNDAMENTAL OVERVIEW</p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">Solana has come under some pressure this week following the failed cloture vote on the Clarity Act and the risk-off sentiment triggered by yesterday’s Fed rate hike. The cryptocurrency erased most of its losses as the market came back to senses and realised the FOMC decision wasn’t more hawkish than expected. </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">IDIOSYNCRATIC CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 107%; font-family: Aptos, sans-serif; font-size: 15px;">Looking ahead, the most important idiosyncratic catalyst is the Solana's Alpenglow consensus upgrade which is designed to replace TowerBFT and reduce finality from roughly 12.8 seconds to around 150 milliseconds. The Solana Foundation says the rollout is occurring in phases and it’s one of the largest protocol upgrades in Solana’s history. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 107%; font-family: Aptos, sans-serif; font-size: 15px;">Current event calendars point to late September/October for activation, although the exact timing has some uncertainty. The market may start positioning before activation. A successful activation may then trigger a “sell the fact” reaction, while delays, bugs or disappointing performance could lead to a selloff in the short-term. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 107%; font-family: Aptos, sans-serif; font-size: 15px;">SYSTEMATIC CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 107%; font-family: Aptos, sans-serif; font-size: 15px;">On the macro side, I would carefully watch the situation in the Middle East as $100 oil, rate hikes and elevated bond yields might put more pressure on Trump to end the war. Look for signs of de-escalation as that's going to weigh on oil prices. </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 107%; font-family: Aptos, sans-serif; font-size: 15px;">Oil has been the main driver of pretty much all other markets given its influence on inflation and interest rate expectations. Lower oil prices would trigger a dovish repricing and support risk sentiment and the crypto market. Of course, the opposite is true if things escalate further.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 107%; font-family: Aptos, sans-serif; font-size: 15px;">Watch also the economic data. When the market pricing and expectations get overstretched, it doesn't take much to see a strong reversal. If the data starts surprising to the downside and pointing to slowing economic activity, the aggressive rate hike bets will likely get pared back and give solana a boost. </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p>SOLANA TECHNICAL ANALYSIS – DAILY TIMEFRAME</p><p></p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">On the daily chart, we can see that <a href="https://www.tradingview.com/symbols/SOLUSD/" rel="follow">Solana</a>is trading at the key support zone around the 97.00 level. The buyers will likely step in around the support with a defined risk below it to position for a rally into the 148.00 level. The sellers, on the other hand, will look for a break lower to pile in for a drop into the major trendline around the 82.00 level next.</p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;">SOLANA TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME</p><p></p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">On the 4 hour chart, we have a falling channel defining the price action that could turn into a bullish flag if the price breaks above the top trendline. If we get a pullback into the top trendline, we can expect the sellers to lean on it with a defined risk above it to position for a drop into the lower bound of the channel. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 148.00 level next.</p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">SOLANA TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME</p><p></p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">On the 1 hour chart, there’s not much we can add here as from a risk management perspective, the buyers will have better risk to reward setups around the support, the lower bound of the channel and on a break above the top trendline. The sellers, on the other hand, will wait for the price to pull back into the top trendline or break below the support to pile in for new lows. The red lines define the <a href="https://investinglive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">average daily range</a> for today. </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">UPCOMING CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;"><a href="https://investinglive.com/EconomicCalendar" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Today</a>we get the US Jobless Claims figures, but traders will keep a close eye on the developments in the Middle East.</p> This article was written by Giuseppe Dellamotta at investinglive.com.