Over the past 24 hours (as of 6:45 p.m. ET), Solana (SOL +4.55%) is trading flat. However, this past day was certainly an interesting one for investors and traders who closely monitor this token on an hourly basis. Dropping 5.8% to a low below $130 per token late last night, Solana has now fully rebounded to the $137 level it was trading at the same time the previous day.
CRYPTO: SOL
Key Data Points
These sorts of intraday swings are actually pretty unusual, at least in my experience covering many of the top tokens. Typically, momentum in either direction continues for an extended period of time (days or weeks), with few tokens experiencing such drastic intraday declines and rallies.
Now, over short-term periods, there are numerous instances of such plunges and recoveries. However, Solana has had a busy news day, so I thought I'd dive into some of the key announcements that led to this recovery rally, and whether it will continue moving forward.
Key catalysts emerge for Solana today
Source: Getty Images.
Among the immediate concerns for investors in Solana and other major cryptocurrencies today comes from the bond market, and increased volatility in this market tied to expectations about the future path of interest rate cuts (and if there will be any). Cryptocurrencies like Solana typically benefit from looser monetary and fiscal policy environments, which interest rate cuts usually bring. Thus, many would think that yesterday's 25 basis point (0.25%) interest rate cut from the Federal Reserve Open Market Committee should have been viewed as a net positive.
However, this interest rate cut was largely priced in ahead of the announcement, and the Fed made some assertions that we may have to wait a while for the next cut. Those hoping for the punch bowl to return as it did following the onset of the pandemic were clearly disappointed by the news, with the entire market dropping late last night and into this morning.
However, two key announcements today have reinvigorated Solana investors. The first announcement came courtesy of JPMorgan, which announced that it would create a Solana-based token (symbol: USCP) to facilitate future capital raises. For those viewing Solana as the go-to platform of choice for developers and institutional entities, this move validates that thesis.
Secondly, the country of Bhutan launched a sovereign gold-backed token on Thursday, also choosing Solana as its preferred blockchain network.https://decrypt.co/351928/bhutan-launches-sovereign-gold-backed-token-solana
For Solana bulls, these recent announcements at the institutional and government levels are meaningful, as they speak to Solana's underlying technology, its stability and security profile, and also the network's speed and low-cost advantages, which are becoming increasingly hard to ignore.
