Solana (SOL) is testing a crucial support zone near $90 after a sharp pullback, but underlying data suggests the story may not be entirely bearish. While the broader crypto market felt pressure following fresh U.S. inflation data, some key indicators hint that a rebound could still be on the table.
The price of Solana slipped around 4% on Wednesday, briefly touching an intraday low of $90.4. This decline pushed its market capitalization down to roughly $51.6 billion, reflecting the wider risk-off mood among investors.
The trigger behind the latest drop was hotter-than-expected data from the U.S. Bureau of Labor Statistics. February’s Producer Price Index (PPI) rose by 0.6%, while core PPI increased 0.3%—both exceeding forecasts. These figures point to persistent inflation, raising doubts about how soon the Federal Reserve might begin cutting interest rates.
Markets are now almost certain the Fed will hold rates steady, with expectations of a pause climbing above 99%, according to the CME FedWatch tool. At the same time, rising oil prices—linked to geopolitical tensions and disruptions at the Strait of Hormuz during the U.S.-Iran conflict—have added further pressure, potentially delaying any rate cuts this year.
Despite these macro headwinds, Solana’s fundamentals are showing signs of strength. One of the biggest positives is the surge in stablecoin supply on the network, which recently hit a record $15.7 billion. This is often seen as a bullish signal, as it suggests there is plenty of capital sitting on the sidelines, ready to enter the market when prices dip.
Adding to the optimism, spot Solana ETFs have recorded consistent inflows for six consecutive weeks, attracting more than $127 million in total. This steady stream of investment reflects growing institutional interest and could help support prices in the near term.
From a technical standpoint, Solana has been following an ascending trendline since early February, which continues to act as dynamic support. Indicators like the MACD are showing upward momentum, while the Aroon Up indicator remains significantly higher than Aroon Down, suggesting buyers still have some control.
At the time of writing, SOL was trading around $89, down over 5% for the day. While short-term volatility may persist, holding above the $90 level could open the door for a recovery. However, if the price drops below the $80 mark—a key psychological level—the current bullish outlook could weaken, potentially leading to a deeper correction.
For now, all eyes remain on whether Solana can defend its support and capitalize on its growing on-chain strength.
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